UPI is reshaping how India pays, saves and borrows

Over the past decade, India has quietly pulled off one of the most ambitious digital infrastructure stories in the world. UPI is increasingly becoming a de facto financial touchpoint for millions. As French author Victor Hugo once famously said, “Nothing is as powerful as an idea whose time has come.” In India, that idea is UPI.

In May 2025, India recorded over 18.68 billion UPI transactions, worth more than ₹25.14 lakh crore, with average daily volumes exceeding 600 million. These numbers reflect more than just convenience; they show scale, trust, and a complete reimagination of how people interact with money. Today, nearly 48.5% of all global real-time payments by volume come from India.

This momentum is not accidental. It is the result of a coordinated public-private effort involving regulators, banks, fintech companies, and technology providers. At its heart lies UPI, now extended through tools like AutoPay and complemented by innovations such as Buy Now Pay Later (BNPL). Together, they are not only driving financial inclusion but also releasing the country’s entrepreneurial energy in ways never seen before.

UPI: India’s new financial identity

UPI’s evolution into a utility-like platform has been one of the most defining trends of India’s digital economy. With over 500 banks and 670 million active QR codes, it has connected the smallest roadside vendor with the largest financial networks. UPI is fast, user-friendly, and nearly ubiquitous across India.

According to a Policybazaar report, UPI now accounts for 33.7% of all insurance premium payments on its platform in FY25, up from 27.9% in FY24. Investment-linked insurance products have seen a 45% increase in UPI usage, while health insurance UPI payments have grown by 34%, now accounting for a quarter of all digital premiums in that segment. For motor insurance, nearly 50% of premiums are now based on UPI. Even in term insurance, where adoption was previously slower, 36% of premiums are paid via UPI, a 25% year-on-year jump.

This is a result not just of technology, but of proactive support from institutions like the Reserve Bank of India (RBI), which backed infrastructure development through mechanisms like the Payments Infrastructure Development Fund (PIDF). The fund helped scale digital acceptance in underserved areas, especially in Tier 3 to Tier 6 locations.

When UPI AutoPay was introduced, it quietly solved a major problem—friction in recurring payments. From insurance premiums to SIPs to subscriptions, setting up automatic debits used to be cumbersome. Today, millions use AutoPay to pay monthly policy EMIs or commit to disciplined financial habits without reminders or delays.

As millions of users grow comfortable with digital transactions, BNPL is emerging as a powerful tool for short-term, small-ticket credit. Whether it’s a college student paying for an online course or a homemaker purchasing electronics, BNPL offers access without the paperwork of traditional loans.

India’s BNPL market is projected to reach US$21.95 billion in 2025, growing at over 13% annually. What makes this growth sustainable is its integration with UPI and AutoPay. Payments are instant, repayment cycles are predictable, and risk assessment is made possible through digital transaction trails.

For users, it means affordability and flexibility. For lenders, it offers new ways to serve previously excluded segments with confidence.

Regulation as an enabler

India’s digital finance story has benefited from a careful balance between innovation and regulation. The RBI has consistently supported growth while safeguarding the system. Its interventions, ranging from standardising recurring payments to capping merchant discount rates (MDR) and encouraging offline UPI, have allowed scale without compromising trust.

The regulator’s ability to anticipate emerging risks and guide the ecosystem forward is one of the reasons UPI has retained both integrity and momentum.

Digital confidence is the new capital

India’s digital transformation is no longer a possibility; it is a present reality. UPI has changed the way people pay, save, borrow, and insure. Tools like AutoPay and BNPL are deepening this transformation by making financial services simpler, smarter, and more accessible.

More importantly, the mindset has shifted. Indians now expect speed, transparency, and control in their financial lives, and the system is rising to meet those expectations. That cultural shift, combined with digital access and responsible credit, is unleashing a new wave of aspiration and economic activity.

Digital inclusion at scale is not just about payments. It is about progress. And India, with the exemplary architecture and intent, is showing the world how it’s done.