Daijiworld Media Network – New Delhi
New Delhi, Apr 7: India’s digital payments ecosystem has reached a stage of strong structural maturity, with Unified Payments Interface (UPI) emerging as the backbone of the country’s retail payment network, according to a report by CareEdge.
The report stated that digital payments now account for 93 per cent of total payment value and an overwhelming 99.8 per cent of transaction volume as of the first nine months of FY26.
It noted that UPI continues to dominate low-value retail transactions, gradually replacing traditional payment modes such as debit cards and prepaid payment instruments, which are either stabilising or witnessing a decline.
Despite UPI’s stronghold, systems like National Electronic Funds Transfer (NEFT), Immediate Payment Service, and National Automated Clearing House remain critical for high-value and bulk transactions within the financial ecosystem.
Data showed that NEFT continues to be widely used for mid-to-high-value transfers, with an average transaction size of around Rs 48,289 as of January 2026, significantly higher than the average UPI transaction value of Rs 1,298.
The report further highlighted that UPI’s share in retail payment volumes has surged from 73.6 per cent in FY23 to an estimated 86 per cent in FY26, underlining its rapid adoption across the country.
“UPI has emerged as a global leader, accounting for nearly 49 per cent of global real-time payment volumes,” said Tanvi Shah of CareEdge Advisory, adding that the platform is expanding internationally with acceptance across multiple countries and over two million merchants.
The shift in consumer behaviour is also reflected in declining usage of physical payment instruments, though credit cards continue to hold relevance for e-commerce and high-value purchases.
Government and Reserve Bank of India initiatives, including the Payments Infrastructure Development Fund, have further accelerated digital payment adoption, particularly in Tier-II and Tier-III cities.
While IMPS continues to grow steadily, UPI’s wider acceptance and ease of use have helped it outpace other systems, reinforcing its position as the primary driver of India’s digital payment revolution.