UPI has become the top choice for payments in India, accounting for 57% of transactions, surpassing cash payments at 38%. A study commissioned by the Finance Ministry attributes this shift to the convenience and instant fund transfer capabilities of UPI. Digital transactions now dominate daily activities, with 65% of UPI users engaging in multiple digital transactions daily, especially among the 18–25 age group.
The study reveals that 90% of users have gained confidence in digital payments after using UPI and RuPay cards, leading to a decrease in cash usage and ATM withdrawals. Cashback incentives have motivated 52% of users to adopt digital payments, while 74% appreciate the speed of transactions.
Merchants have widely embraced digital payments, with 94% of small merchants adopting UPI. Satisfaction among merchants is high at 72%, citing faster transactions, improved record-keeping, and operational convenience. Additionally, 57% of merchants reported increased sales post digital adoption.
Incentives have played a crucial role in reducing cost barriers for merchants and banks, facilitating merchant onboarding and enhancing trust in digital payment systems. The collaborative efforts of the government, NPCI, banks, fintech firms, and payment service providers have bolstered India’s digital payments ecosystem, aligning with the vision of a digitally empowered economy.
