UPI Transactions Grew 27% Annually in February
UPI transactions in India rose 27% year-over-year in February 2026. The continued double-digit growth underscores deepening digital payment adoption among both consumers and small merchants. This provides a strong macro tailwind for commerce platforms built around UPI-based checkouts.
While February saw a slight dip in total transaction volume to 20.39 billion due to a shorter month, the average daily transaction count surged to a record 728 million. This indicates a strengthening of user habit, moving beyond seasonal peaks to become ingrained daily behavior for consumers and merchants. The total value of transactions in February reached Rs 26.84 lakh crore, a 22% increase year-over-year. This consistent double-digit value growth highlights UPI's expanding role from small, peer-to-peer transfers to larger and more frequent merchant payments, solidifying its position as core financial infrastructure. Person-to-merchant (P2M) transactions have been a primary engine of this growth, consistently making up a larger share of the total volume. This is fueled by the widespread adoption of QR codes, with over 709 million QR touchpoints active across the country, making "scan-and-pay" a default for daily essentials at neighborhood stores. The National Payments Corporation of India (NPCI) is now focusing on optimizing the system for reliability at scale. Recent guidelines aim to improve system resilience and reduce transaction failures during peak hours. Additionally, starting February 1, 2026, a 50% rebate on switching fees for P2M transactions is being applied daily to banks, further incentivizing merchant payment processing. The market remains concentrated with PhonePe and Google Pay commanding the majority of transaction volume. As of January 2026, PhonePe led with a 45.7% share of transaction volume, followed by Google Pay at 33.3%. The ecosystem may see shifts as players like Apple Pay are expected to enter the Indian market around mid-2026.
