A decade on, the Unified Payments Interface (UPI) stands out as one of the most transformative pillars of India’s digital ecosystem.
UPI has expanded from just 17.86 million transactions through which Rs 6,952 crore was settled in FY17 to 218.98 billion transactions settling nearly Rs 285 lakh crore in FY26 (April-February). This reflects a more than 12,000-fold surge in volume and over 4,000 times increase in value, according to data from the National Payments Corporation of India, which runs UPI.
Launched on August 25, 2016 by the Reserve Bank of India (RBI), with 21 banks and 19 UPI-enabled apps, the system quickly gained institutional scale. Soon after, major banks like SBI and HDFC Bank joined in October 2016, accelerating adoption across the country.
At the infrastructure level, the NPCI has been the core engine of this shift. It now processes over 22 billion transactions per month, with a cumulative value exceeding $47 billion, regulatory data shows.
The early years saw steady traction with both transactions and users getting added to the network. Transactions rose from 915 million in FY18 to 5.39 billion in FY19 (Rs 8.77 lakh crore), reaching 12.52 billion in FY20 (Rs 21 lakh crore). That phase saw user adoption climb from 31.2 million to 143 million.
Post Covid-19 rise
The pandemic became a structural inflection point. Post-Covid, UPI volumes surged 67% above pre-pandemic levels by November 2020, and 61% higher by August 2021, with monthly transactions rising to nearly 3,600 million. Registered users grew to 223 million by August 2021, up from 132 million pre-Covid.
By October 2020, UPI had crossed one billion monthly transactions, scaling to five billion by March 2022, and further to 10 billion by August 2023, doubling again to over 20 billion by August 2025.
A striking milestone came when growth from 19 to 20 billion monthly transactions occurred in just one month, highlighting compounding network effects.
User expansion mirrored this trajectory, rising from 203 million (2021) to 504 million by August 2025, nearly half of India’s adult population. NPCI also aims to scale this to one billion users over the next decade, RBI Deputy Governor T Rabi Sankar said earlier this year.
UPI features boom
According to the Ministry of Finance, the post-2021 “virality phase” saw innovation-led acceleration through features like AutoPay, UPI Lite, and credit integration, with transaction values rising from around $110 billion to nearly $290 billion.
UPI’s footprint has since gone global — it is live in eight countries — Singapore, UAE, France, Mauritius, Nepal, Sri Lanka, Bhutan, and Qatar. It has also rolled out innovations such as ATM withdrawals and Lite payments.
Today, UPI powers 85% of India’s digital transactions, with over 65 million merchants onboarded, supported by 5.45 crore digital touchpoints and 56.86 crore QR codes, as reported by ET. It accounts for 49% of global real-time payment volume and 81% of retail digital payments in FY25, underscoring its global dominance.
UPI’s growth in FY26
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Fintech players led the growth
Among fintech players, Paytm’s market share, which declined from around 13% in early 2024 to nearly 7% following the banking business disruption, has stabilised over the past year, as reported by ET. In August, the platform recorded 1.4 billion UPI transactions, up from one billion a year earlier.
Despite increasing competition, Google Pay and PhonePe continue to dominate the UPI landscape. However, their combined market share has declined to 80% in August from 85% a year ago, indicating gradual diversification within the ecosystem.
Both players remain significantly above the proposed 30% market share cap, a regulatory threshold expected to come into effect by the end of 2026, the ET report mentioned.
For FY25, NPCI reported a 41.7% increase in net profit to Rs 1,552 crore, according to credit rating agency ICRA. As a not-for-profit entity, NPCI classifies profits as a revenue surplus. Its revenues rose 19% to Rs 3,270 crore in FY25 from Rs 2,749 crore in FY24.
Why it matters?
UPI has reshaped India’s digital economy by bringing over 65 million merchants onto its platform versus 11-12 million POS users, spanning street vendors to luxury retail.
While the rapid expansion of bank accounts has provided the basic foundation for inclusion, the Economic Survey 2025-26 noted that active use of these accounts is key to actual financial empowerment among the masses. UPI has helped bridge this gap by converting account ownership into actual transactions.
Policy initiatives, like MDR waivers and the Payments Infrastructure Development Fund (PIDF), have deepened reach, while value-added services are expected to drive the next growth phase.
“The IMF’s report reinforces a sentiment widely shared across India: that UPI is not merely a tool of convenience but an instrument of empowerment,” a PIB release of September 2025 said.
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