India’s Digital Payments Surge in FY25: UPI Leads the Charge

India's digital payments landscape witnessed remarkable growth in FY2024–25, with total digital transaction volume soaring by 34.8% and transaction value rising by 17.9%, as per the Reserve Bank of India’s (RBI) latest Annual Report.

Retail digital payments posted a similar trajectory, increasing 34.9% in volume and 16.1% in value. The Unified Payments Interface (UPI) continued to dominate the sector, registering a 41.7% spike in transaction volume and a 30.3% rise in value. UPI alone accounted for a staggering 84% of all retail digital payment volumes.

Among other systems:

• NEFT transactions grew by 32.4% in volume and 13.4% in value.
• RTGS saw a 12% increase in volume and a 17.8% rise in transaction value.

Digital transactions made up 99.9% of all non-cash retail payments, marginally higher than 99.8% recorded in FY24.

Shifts in Currency Usage Reflect Digital Momentum

The currency-deposit ratio declined to 15.4% as of March 21, 2025, down from 15.9% a year earlier, indicating a stronger consumer inclination toward digital modes of payment.

To further enhance ease of use and access, the RBI introduced several new features for UPI:

• Delegated Payments
• UPI access at Cash Deposit Machines
• Third-party access to PPI wallets via UPI
• Auto-replenishment for UPI Lite, FASTag, and NCMC balances

Additionally, transaction limits were raised, including a new cap of ₹5 lakh for tax payments through UPI.

UPI Goes Global

India’s push for internationalising digital payments gained momentum as UPI-enabled QR-based payments were launched in countries like France, Nepal, Mauritius, and Sri Lanka. The RBI also joined Project Nexus, an initiative led by the Bank for International Settlements (BIS), aimed at interconnecting UPI with real-time payment systems across ASEAN nations

Strengthening Security and Accessibility

To bolster digital payment security, the RBI:

• Expanded the Central Payments Fraud Information Registry (CPFIR) to include more financial entities.
• Proposed.bank.in and .fin.in as secure domains to curb phishing attacks.

Furthermore, new guidelines were released to improve digital accessibility for persons with disabilities.

Rise of the Digital Rupee (CBDC-R)

Adoption of the retail central bank digital currency (CBDC-R) saw significant progress. The value of the digital rupee in circulation surged 334% year-on-year, reaching ₹1,016.46 crore in FY25 from ₹234.04 crore in FY24.

Also Read: Key Trends to Watch in June 2025: RBI MPC Meeting, Inflation Data and More 

Conclusion

FY25 marked a significant milestone in India’s journey toward a digitally empowered economy. With robust growth across digital payment platforms—especially UPI—and continued efforts by the Reserve Bank of India to enhance infrastructure, accessibility, and security, the digital payments ecosystem has become more inclusive, efficient, and globally connected.

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