India’s digital payment sector recorded a monumental leap in the financial year 2024–25, as highlighted in the Reserve Bank of India’s (RBI) latest annual report. The overall volume of digital transactions surged by 34.8%, while the total transaction value rose by 17.9%, showcasing the nation’s fast-paced shift towards a cashless economy. Retail digital payments alone observed a 34.9% increase in volume and a 16.1% growth in value. This performance underscores India’s continued dominance in global digital transactions and reflects the growing trust of consumers and businesses in digital payment systems.

UPI Emerges as the Backbone of India’s Payment Infrastructure

The Unified Payments Interface (UPI) has emerged as the core pillar of India’s digital finance system, accounting for an astonishing 84% of all retail digital transactions. In FY25, UPI processed more than 11,761 crore transactions, which represents a 59.2% jump from the previous year. The total value of these transactions amounted to ₹180.24 lakh crore, marking a 44.8% increase. UPI’s share in retail digital payment volume has grown from 75.6% in FY23 to 83.9% in FY24. Its widespread adoption across urban and rural regions continues to reinforce India’s global position, with the country now contributing 48.5% of global real-time payment volumes.

Other Digital Channels Show Robust Growth Too

While UPI continues to dominate, other digital payment systems such as National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS) also posted healthy growth. NEFT saw a 32.4% rise in transaction volume and a 13.4% increase in value, while RTGS recorded a 12% increase in volume and 17.8% growth in transaction value. These figures highlight the growing reliance on digital platforms for both retail and large-scale transactions. Notably, the share of digital transactions in non-cash retail payments reached an all-time high of 99.9% in FY25, signaling a strong national commitment to financial digitization and convenience.

New UPI Features and Global Expansion Fuel Further Adoption

The RBI introduced several key innovations to the UPI platform during the year to improve user experience and system efficiency. These included features like Delegated Payments, UPI access through Cash Deposit Machines, and integration of Prepaid Payment Instruments (PPIs) with third-party UPI apps. The regulator also facilitated automatic balance top-ups for UPI Lite, FASTag, and NCMC cards. Transaction limits were revised, including an increase in the UPI tax payment cap to ₹5 lakh. On the international front, UPI’s QR-code-based transactions were launched in countries such as France, Nepal, Mauritius, and Sri Lanka, significantly expanding India’s digital financial reach.

Strengthening Cybersecurity and Enabling Inclusive Growth

As digital transactions rise, the RBI has turned its focus towards enhancing cybersecurity and digital inclusivity. The introduction of ‘Delegated Payments’ allows a trusted individual to make payments on behalf of someone else, aiming to empower less tech-savvy users. To combat rising cyber threats, the RBI also proposed new secure internet domains such as ‘bank.in’ for banks and ‘fin.in’ for financial institutions. These measures are part of the RBI’s broader Payments Vision 2025 strategy, which aims to deepen digital access, boost consumer confidence, and maintain the integrity of India’s financial ecosystem as it leads the way in real-time global payments.