India’s digital payments landscape continued its strong expansion in the second half of 2025, with the Reserve Bank of India reporting that the Unified Payments Interface has firmly established itself as the leading platform for transaction activity. According to the latest Payment Systems Report, UPI accounted for 85.5% of total digital payment transaction volume, highlighting its central role in India’s rapidly growing cashless economy.
The report explained that UPI’s growth has been driven by widespread smartphone usage, improved digital infrastructure, and increasingly simple and instant payment experiences. As digital adoption expands across both cities and smaller towns, UPI has become the preferred method for everyday financial transactions. In comparison, National Electronic Funds Transfer and Prepaid Payment Instruments each accounted for 3.6% of transaction volume, while Real Time Gross Settlement contributed only 0.1%, reflecting its focus on high value transfers rather than retail usage.
However, the report also highlighted a different picture when looking at transaction value. Real Time Gross Settlement dominated with a 68.6% share of total value, followed by NEFT at 14.9%, while UPI accounted for 9.5%. This shows that although UPI leads in number of transactions, traditional banking systems still handle the majority of high value financial flows.
The RBI also noted the remarkable long term expansion of India’s digital payment ecosystem. Between 2016 and 2025, total digital transaction volumes increased 33 times, showing a massive shift toward electronic payments. Over the last five years, transaction volumes rose from 643.7 billion transactions in 2021 to 2.6819 trillion transactions in 2025.
In terms of value, digital payments grew from 17.41 trillion US dollars to 36.89 trillion US dollars during the same period. The central bank reported a compound annual growth rate of 42.9% in transaction volume and 16.6% in transaction value, reflecting strong and sustained growth in the sector.
The Reserve Bank of India emphasized that increasing consumer trust in secure, fast, and convenient payment systems continues to accelerate India’s transition toward a highly digitized financial ecosystem, with UPI playing the most dominant role in everyday transactions.
