Blitz Bureau
NEW DELHI: UPI has emerged as the most preferred mode of payment, accounting for 57 per cent of total payment transactions in India, surpassing cash transactions at 38 per cent, primarily due to ease of use and instant fund transfer capability, according to an independent study commissioned by the Finance Ministry.
Digital payments now dominate everyday transaction behaviour, with 65 per cent of UPI users reporting multiple digital transactions per day. Preference for UPI is particularly pronounced among younger users in the 18–25 age group, where adoption stands at 66 per cent, indicating a strong behavioural shift toward digital-first financial habits, the study stated.
It finds that 90 per cent of users reported increased confidence in digital payments after using UPI and RuPay cards, accompanied by a marked decline in cash usage and ATM withdrawals. Cashback incentives were identified as a key motivation for adoption by 52 per cent of users, while 74 per cent cited speed of payment as the primary advantage. Among merchants, digital acceptance has reached near universality, with 94 per cent of small merchants reporting adoption of UPI. About 72 per cent expressed satisfaction with digital payments, citing faster transactions, improved record-keeping, and operational convenience, while 57 per cent reported an increase in sales following digital adoption.
The report highlights that incentives have played a critical role in reducing cost barriers for merchants and acquiring banks, accelerating merchant onboarding, and building trust in digital payment systems across income groups and geographies. Coordinated efforts of the government, the National Payments Corporation of India (NPCI), banks, fintech players, and payment service providers have collectively strengthened India’s digital payments ecosystem and advanced the vision of a less-cash, digitally empowered economy.
