India’s digital payments ecosystem reached record levels in the first half of 2025, with Unified Payments Interface (UPI) driving both scale and inclusivity, according to the latest Worldline India Digital Payments Report (1H 2025).
The report reveals that India processed over 106 billion UPI transactions valued at ₹143.3 trillion in the first six months of 2025 — a 35% year-on-year growth in volume and 23% increase in value. Average ticket sizes continued to fall to ₹1,348, underscoring UPI’s dominance in small-value, high-frequency transactions.
678 Million UPI QRs Powering Inclusion
India’s merchant network has expanded dramatically, with UPI QR codes more than doubling to 678 million by June 2025, representing a 111% increase in just 18 months. PoS terminals rose 29% to 11.2 million, while Bharat QR grew 12% to 6.72 million. The surge was fueled by micro-merchants and kirana stores adopting zero-cost, interoperable QR systems, making digital acceptance nearly universal.
Kirana Effect and Micro-Spends
The report highlights the “Kirana Effect,” where small, frequent UPI transactions are powering large-scale adoption. P2M (person-to-merchant) payments surged 37% to 67 billion, while P2P (peer-to-peer) transfers grew 31% to 39 billion, showing digital as the default even for daily essentials like groceries and utilities.
Cards Move Upmarket, Credit Grows Online
While debit card usage at PoS declined by 8% year-on-year, credit cards continued to thrive, with spends crossing ₹2.2 trillion monthly. The report notes a clear shift — UPI dominates frequency, credit cards capture value, and debit cards are used mainly for cash withdrawals.
FASTag and Bharat Connect Expand Horizons
The FASTag ecosystem processed 2.3 billion transactions worth ₹405 billion, now extending from highways to parking and campuses. Meanwhile, Bharat Connect (BBPS) witnessed 76% growth in volume and 220% in value, driven by recurring payments across utilities, education, and subscriptions.
Net Banking: The Invisible Giant
Despite UPI’s ubiquity, Net Banking moved ₹717 trillion in 1H 2025, up 30% year-on-year, reflecting its continued dominance for large-value corporate and government transactions.
The Road Ahead
Worldline predicts the next phase of growth will be shaped by biometric UPI, SoftPoS adoption, and global UPI corridors. The report concludes that India’s payments strength lies not in transaction size but in frequency, inclusion, and trust—making it the world’s most dynamic digital payments ecosystem.
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