UPI Becomes India’s Favourite Payment Mode: Commands 80% Share in Digital Transactions

New Delhi, February 17, 2026: The way India pays has transformed dramatically over the past few years. From cash to cards, and now to UPI (Unified Payments Interface), digital payments are increasingly becoming the preferred choice for both consumers and merchants. According to a recent study by the Department of Financial Services, Ministry of Finance, UPI now accounts for 80% of all digital transactions in India.

Explosive Growth in Digital Payments

Between 2021 and 2025, digital transactions surged nearly 11-fold, driven by greater fintech participation and improved digital infrastructure. The number of UPI QR codes deployed rose from 9.3 crore to 65.8 crore, making adoption easier for merchants. Similarly, third-party app providers increased from 16 to 38, strengthening the overall ecosystem.

Youth Lead the Digital Shift

Young Indians are at the forefront of this transformation. Among users aged 18–25, UPI adoption has reached 66%, highlighting a strong preference for instant, digital money transfers. The platform allows users to send money directly from one account to another by simply scanning a QR code — no cash, debit, or credit card needed.

UPI Outpaces Cash and Cards

UPI has now become the most popular payment method, accounting for 57% of all payment transactions, compared with 38% for cash. The March 2025 data shows a massive jump in banking participation on the UPI platform, from 216 banks in March 2021 to 661 banks, reflecting the growing trust in digital payments.

Why Users Prefer UPI

The study revealed that 65% of UPI users make multiple transactions daily. Digital payments via UPI and RuPay have also reduced reliance on cash and ATM withdrawals. Around 52% of users were motivated by cashback offers, while 74% cited transaction speed as the biggest benefit.

Merchants Embrace UPI

Merchants are equally enthusiastic. 94% of small traders have adopted UPI, and 72% reported satisfaction with digital payments due to faster transactions, easier record-keeping, and operational convenience. Additionally, 57% of merchants saw an increase in sales after embracing digital payment methods.

The data clearly indicates that UPI has not only revolutionized payments for urban and rural consumers alike but has also become the backbone of India’s digital economy, creating efficiency and convenience for millions of users and businesses across the country.