India’s digital payments ecosystem continues to thrive, powered by its robust real-time infrastructure — the Immediate Payment Service (IMPS) and the Unified Payments Interface (UPI). While IMPS caters largely to fund transfers, UPI has emerged as the go-to platform for everyday transactions.

According to GlobalData, a leading data and analytics company, the overall value of UPI payments in India will grow at a compound annual growth rate (CAGR) of 14.7% between 2025 and 2029, reaching ₹532.6 lakh crore ($6.4 trillion) by 2029.

UPI payments in India surged by 30.4% in 2024, driven by increased consumer spending and a rise in mobile wallet adoption, as per GlobalData’s Payment Instrument Analytics. The UPI system, which allows customers to link bank accounts with mobile payment apps, facilitates instant transfers using a virtual ID, mobile number, or QR code — making transactions fast and seamless.

The platform’s convenience has fuelled its widespread use for day-to-day transactions, a trend that gained momentum after the COVID-19 pandemic as consumers increasingly shifted towards non-cash payment methods.

“UPI has become a mainstream payment method in India, gradually displacing traditional cash payments,” said Ravi Sharma, Lead Banking and Payments Analyst at GlobalData. “Launched in 2016, UPI has revolutionised the Indian payments space, enabling users to make digital payments at the convenience of their mobile phones and allowing merchants to accept digital payments simply by using a mobile number or QR code.”

The report noted that rising banked population, growing smartphone penetration, and the proliferation of UPI-enabled payment apps have been key growth drivers. The UPI ecosystem remains dominated by major players such as Google Pay, PhonePe, and Paytm, which continue to expand its reach. UPI’s global partnerships have also strengthened its footprint — the integration with Singapore’s PayNow in February 2023 marked a major step towards facilitating low-cost cross-border fund transfers, with similar tie-ups in Nepal, the UAE, and Bhutan.

Over the years, multiple features have been added to enhance UPI’s functionality. The linkage with credit cards has enabled users to make merchant payments via QR codes without the need for POS terminals. The UPI Circle, launched in August 2024, introduced shared access for family or group transactions under one primary account, expanding financial inclusion.

Most recently, in September 2025, Paytm launched “Paytm Postpaid”, a credit line on UPI in partnership with Suryoday Small Finance Bank, allowing users to “Spend Now, Pay Next Month” without relying on traditional credit cards.

“The rising mobile wallet adoption, coupled with high merchant acceptance and constant expansion of UPI features, has led to a significant rise in UPI-based payments in the country,” Sharma added.

“Improving payment infrastructure, preference for QR-based payments over traditional POS systems, and a consumer shift towards electronic modes remain key growth catalysts.”

Overall, India’s UPI card payments market is projected to grow by 18% in 2025, reaching ₹307.4 lakh crore ($3.7 trillion), underscoring the continuing transformation of India’s digital payment landscape.