Sustained growth in digital payment adoption has been recorded, with UPI emerging as the preferred mode of transaction. According to the findings, UPI accounted for 57% of transactions among surveyed users, overtaking cash, which stood at 38%. Nearly 65% of UPI users reported making multiple digital transactions daily, underscoring a significant behavioural shift towards digital-first payments. 

UPI emerges as preferred mode 

The data forms part of a report released by the Department of Financial Services, Ministry of Finance, titled ‘Socio-Economic Impact Analysis of the Incentive Scheme for Promotion of RuPay Debit Card and Low-Value BHIM-UPI (Person-to-Merchant) Transactions’. The report was unveiled during the Chintan Shivir held on February 13–14, 2026. 

Adoption of UPI was highest among the 18–25 age group at 66%, signalling a strong behavioural shift toward digital-first financial habits. Around 90% of users reported increased confidence in digital payments after using UPI and RuPay cards. Cashback incentives motivated 52% of users while 74% cited speed as the primary advantage. 

The study, conducted by an independent third-party research agency in consultation with the National Payments Corporation of India, evaluates the effectiveness of the government’s incentive framework in promoting digital payments, strengthening infrastructure, and advancing financial inclusion. 

Scheme to accelerate digital adoption 

Launched in FY21–22 and extended till FY24–25, the incentive scheme was conceptualised to accelerate universal adoption of digital payments, reduce cash dependency, and formalise routine economic activity. Structured budgetary support was provided to acquiring banks and ecosystem participants to keep digital transactions affordable and sustainable. 

The socio-economic analysis is based on a primary survey of 10,378 respondents across 15 states, including users, merchants, and service providers. The study covered urban and semi-urban areas across five geographical zones and used face-to-face Computer Assisted Personal Interviews (CAPI) between July 22 and August 25, 2025. 

Merchant adoption and infra expansion 

Digital acceptance among small merchants reached 94%, with 72% expressing satisfaction and 57% reporting higher sales post-adoption. The report credits incentives with reducing cost barriers and accelerating merchant onboarding. 

Digital transactions grew nearly elevenfold during the scheme period, with UPI accounting for 80% of total digital transactions. UPI QR deployments expanded from 9.3 crore to 65.8 crore while banks on the UPI platform increased from 216 in March 2021 to 661 by March 2025. 

The government allocated ₹8,276 crore under the scheme, supporting ecosystem players and reinforcing India’s transition toward a less-cash, digitally empowered economy.