UPI Accounts for 81% of India’s Retail Digital Payments in FY25: Finance Ministry
Digital payment volumes grew 58.42% in FY 2022–23, 44.39% in FY 2023–24, and 35.04% in FY 2024–25, reflecting continued expansion of India’s digital financial ecosystem.
Coordinated efforts of government, RBI and NPCI drive rapid expansion of digital payments ecosystem
New Delhi: India’s digital payments ecosystem has witnessed rapid expansion in recent years, with the unified payments interface (UPI) accounting for 81% of total retail digital payment transactions in FY 2024–25, according to information shared by the Ministry of Finance.
The data indicates that coordinated initiatives by the government, the reserve bank of India (RBI) and the national payments corporation of India (NPCI) have accelerated the adoption of digital payments across the country.
The information was shared in the Lok Sabha by finance minister Nirmala Sitharaman on Monday, highlighting the continued growth of India’s digital payments ecosystem and the increasing role of UPI in retail transactions.
Rapid growth in digital transactions
Retail digital payment transactions have grown steadily over the past four financial years.
According to official data, the volume of retail digital transactions increased from 7,176.9 crore in FY 2021–22 to 22,167.9 crore in FY 2024–25, while the total value of transactions rose from ₹457.44 lakh crore to ₹849.12 lakh crore during the same period.
The data also shows sustained annual growth in transaction volumes and value. Digital payment volumes grew 58.42% in FY 2022–23, 44.39% in FY 2023–24, and 35.04% in FY 2024–25, reflecting continued expansion of India’s digital financial ecosystem.
Drivers of digital payment adoption
According to the finance ministry, the expansion of digital payments has been supported by several enabling factors.
These include increasing smartphone penetration, Aadhaar-based authentication, electronic know-your-customer (e-KYC) processes, expansion of merchant acceptance infrastructure and improvements in digital public infrastructure that simplify onboarding and interoperability across payment platforms.
Government initiatives such as the incentive scheme for promotion of digital payments and the payments infrastructure development fund (PIDF) have also contributed to wider adoption of digital payment systems.
Expansion of payment infrastructure
To strengthen payment infrastructure, especially in rural and semi-urban areas, RBI established the payments infrastructure development fund.
Under this initiative, around 5.80 crore digital touchpoints and approximately 56.86 crore QR codes have been deployed across the country to facilitate digital transactions.
Measures to address cyber fraud risks
With the rapid growth in digital transactions, authorities have also implemented safeguards to prevent cyber fraud.
Measures include device binding between mobile numbers and devices, two-factor authentication through personal identification numbers (PINs) and transaction limits in certain cases.
NPCI has also introduced AI and machine learning-based fraud monitoring systems to detect suspicious transactions and alert banks.
Authorities have also launched awareness campaigns through SMS, radio and other media to educate users about safe digital payment practices.
Reporting mechanisms for cyber incidents
To enable citizens to report financial fraud and cyber incidents, the ministry of home affairs has launched the national cybercrime reporting portal (cybercrime.gov.in) along with the national cybercrime helpline 1930.
The department of telecommunications has also launched the digital intelligence platform (DIP) and the Chakshu facility, which allow citizens to report suspected fraudulent communications received through calls, SMS or messaging platforms.
Inclusion for low-connectivity areas
To expand digital payment access in regions with limited internet connectivity, NPCI has introduced solutions such as UPI 123PAY, which allows payments through interactive voice response systems and sound-based proximity payments.
Another service, Hello UPI, enables conversational payments, further simplifying digital transactions for users.
Financial literacy initiatives
Authorities have also focused on improving financial literacy to support the safe adoption of digital payments.
As of March 31, 2025, 2,421 centres for financial literacy have been established across the country to promote awareness of digital financial services.
Financial literacy week has also been conducted annually since 2016 to educate citizens about financial inclusion and responsible use of digital payment systems.
