UPI Transaction Growth Eases to 30%, Volumes Seen at 240 Billion in FY26

Unified Payments Interface (UPI) is expected to record around 240 billion transactions in FY26, up from 185 billion in FY25, according to data from the National Payments Corporation of India (NPCI). This shows a year-on-year growth of about 30%. 

The increase comes after a higher 41% growth recorded in FY25. UPI had earlier logged 131 billion transactions in FY24, indicating that while volumes continue to expand, the rate of growth has eased as the base has widened. 

Daily Volumes See Steady Increase 

Average daily transactions rose to 657 million in FY26 from 506 million in the previous financial year. The platform crossed 700 million daily transactions in early August and later surpassed 800 million in March. 

The current trajectory suggests that the target of one billion transactions per day may be reached in the next financial year if momentum sustains. 

Subsidy Allocation Remains Uncertain 

Government support for small-value UPI merchant payments has reduced over time. For FY26, ₹2,200 crore has been allocated as subsidy, though the amount has not yet been released with the financial year nearing closure. 

In FY25, actual disbursement was lower than budgeted levels. Industry estimates indicate payouts of about ₹1,050 crore, compared with an allocation of ₹2,000 crore and a prior announcement of ₹1,500 crore. 

Industry Seeks MDR Reintroduction 

Payments firms and fintech companies have reiterated the need for a Merchant Discount Rate (MDR) on UPI transactions. MDR, which was removed in 2020, was previously set at 30 basis points. 

The industry has proposed reinstating MDR at 0.3% for large merchants with annual turnover above ₹40 lakh, citing the need for a more predictable revenue model. 

Read More: Centre Unveils ‘PRARAMBH 2026’ Ahead of New Income Tax Act Rollout on April 1, 2026! 

Conclusion 

UPI continues to record higher transaction volumes, supported by increased usage, even as subsidy disbursements and revenue mechanisms remain under discussion. 

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