India's Digital Payment Revolution: UPI Dominates with 85% Share as Digital Transactions Reach 99.8% of Total Volume

UPI transaction volumes reached a remarkable 17,221 crore in calendar year 2024.

According to the Reserve Bank of India's recent report released on Thursday, digital payment transactions have dominated India's payment ecosystem, representing 99.7% of transaction volume and 97.5% of value during calendar year 2024. This trend has continued into the first half of 2025.

The RBI's half-yearly Payment System Report for June 2025 highlights the extraordinary growth in India's payments ecosystem in recent years. India's payment landscape offers diverse options, including traditional paper-based instruments like cheques and various digital payment systems.

Digital payment systems encompass NEFT, IMPS, RTGS, NACH, debit and credit cards, prepaid payment instruments, and UPI. The report indicates growth across all payment categories except paper-based instruments, with cheques now accounting for only 2.3% of total transaction value.

Transaction volumes have grown exponentially from 3,248 crore in CY 2019 to 20,849 crore in CY 2024, while values increased from Rs 1,775 lakh crore to Rs 2,830 lakh crore during the same period. For the half-year ending June 2025, transaction volume reached 12,549 crore, amounting to Rs 1,572 lakh crore.

Digital payments have been the primary driver of this growth. In CY 2019, digital payments accounted for 96.7% of total payment transactions by volume and 95.5% by value. By CY 2024, these figures increased to 99.7% in volume and 97.5% in value. The first half of 2025 saw digital payments comprising 99.8% of volume and 97.7% of value.

UPI (Unified Payments Interface) dominates transaction volume with an 85% share during H1 2025, though it represents only 9% of transaction value. Conversely, the Real Time Gross Settlement (RTGS) system accounts for 69% of transaction value but only 0.1% of volume during the same period.

The report explains that RTGS, as a wholesale payment system with a minimum transaction amount of Rs 2 lakh, contributes significantly to transaction value while processing fewer transactions. UPI, meanwhile, handles numerous small-value transactions, resulting in high volume but relatively lower value share.

RTGS transaction volumes grew from 14.8 crore in CY 2019 to 29.5 crore in CY 2024, with values increasing from Rs 1,388.7 lakh crore to Rs 1,938.2 lakh crore. By H1 2025, RTGS had already processed 16.1 crore transactions worth Rs 1,079.2 lakh crore.

NEFT transactions more than tripled in volume between CY 2019-2024, growing from 262.2 crore to 926.8 crore, while values rose from Rs 232.9 lakh crore to Rs 432.8 lakh crore. In H1 2025, NEFT processed 490.5 crore transactions amounting to Rs 237 lakh crore.

UPI has emerged as India's most widely used retail fast payment system due to its efficiency, 24/7 availability, and user-friendly nature. UPI transactions surged from 1,079 crore in CY 2019 to 17,221 crore in CY 2024, with values increasing from Rs 18.4 lakh crore to Rs 246.8 lakh crore. H1 2025 saw 10,637 crore UPI transactions worth Rs 143.3 lakh crore.

Credit card usage has also seen significant growth, with transaction volumes increasing from 208.7 crore in 2019 to 447.2 crore in 2024, and values rising from Rs 7.1 lakh crore to Rs 20.4 lakh crore. H1 2025 recorded 266.3 crore transactions amounting to Rs 11.1 lakh crore.

Private sector banks continue to dominate the credit card market, with their share increasing from 65.8% in June 2020 to 70.8% in June 2025. Public sector banks increased their share from 22.5% to 24.1% during this period, while foreign banks saw a sharp decline from 11.7% to 4.1%, with outstanding credit cards decreasing from 67 lakh to 45 lakh. Small Finance Banks had issued 10 lakh cards by June 2025.

Debit card usage has declined since 2019 in both volume and value. The report notes that while credit cards are increasingly used for online purchases and accessing credit, debit cards are primarily used for cash withdrawals and basic transactions. Both payment instruments face growing competition from digital alternatives.