India’s Unified Payments Interface (UPI) stands as a global exemplar of digital public infrastructure success. In June 2025 alone, it processed over 18.4 billion transactions, with merchant (P2M) payments alone accounting for 11.7 billion transactions and Rs 6.83 lakh crore in value.[1] This scale is unprecedented—but the more important question is whether this growth reflects depth, inclusivity, and balanced development.
While NPCI has previously shared data on transaction size brackets, two critical additions—state-wise usage data and merchant category-wise transaction counts with value—were newly introduced in June 2025. These additional data sharing mark a significant commitment to transparency and public access to granular data. They now enable much richer, disaggregated analysis of UPI’s spread and economic integration.
An analysis of UPI transaction volumes by state shows wide variation in digital payments adoption. States like Maharashtra, Karnataka, and Uttar Pradesh led in raw volumes.
Also read: UPI: The Imperative for a unified QR ecosystem
When adjusted for population, Delhi, Puducherry, and Chandigarh topped the per capita transaction rankings. Many low-income or lower digital-density states—such as Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan, Jharkhand, and Chhattisgarh—trailed significantly in per capita usage, exposing a digital divide that echoes India’s broader economic disparities.
Authors Notes: NPCI’s June 2025 release included state-wise UPI transaction volumes for all states/Union Territories in India, accounting for approximately 55.26% of total UPI transaction volume. To estimate per capita transaction levels for all states, the remaining 44.74 % was distributed using the same ratio observed in the reported data across those states. While this introduces a modeled assumption for some states, it enables a consistent comparison across the national landscape.
Urbanised states with better literacy, financial infrastructure, and proactive digital policies see far deeper penetration. In contrast, lagging states often suffer from poor QR acceptance, low awareness, and limited access to smartphones or broadband connectivity. Thus, digital public infrastructure (DPI), while present in principle, remains underutilised in practice.
While NPCI currently does not publish disaggregated data for P2G or G2P (Government-to-Person) transactions, their importance is well-recognised. In many developing countries, government payments—both receipts (e.g., taxes, service charges) and disbursements (e.g., pensions, welfare, subsidies)—have played a catalytic role in scaling digital payment adoption. It is expected that, in the future, NPCI will capture and share more granular data on these flows, enabling deeper insights into the full spectrum of UPI usage.
This estimate, while approximate, underscores UPI’s growing role in India’s consumption economy. The data comparison draws from NPCI’s merchant transaction totals and MoSPI’s national accounts statistics. Although structural mismatches exist between the two datasets (especially regarding informal sector spending), it provides a useful proxy for the digitalisation of private consumption.
Most high-frequency merchant segments reflect urban mass consumption—groceries (INR 222 avg.), fast food (INR 118), telecom (INR 236). In contrast, utilities show higher average values (₹1,300+), pointing to P2G potential. Missing categories—education, agri-inputs, public transit—signal the next frontier for UPI inclusion.
First Published: Sep 16, 2025, 17:49
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