The rise of ‘Habit Payments’ on UPI: How everyday digital checkouts are becoming a natural consumer behaviour

With 20.47 billion transactions in November alone, UPI has swiftly become a behavioural default instead of being just one of the payment options. RBI data showing UPI accounting for 85% of India’s digital payment volumes in H1 CY25 reinforces this shift.

UPI has evolved from a payment method into a behavioural habit - a default action woven seamlessly into India’s daily life. This shift is redefining how brands think about customer journeys. Consumers no longer tolerate payment friction; they expect transactions to happen instantly, invisibly, and repeatedly without effort.

"We see this as a massive opportunity for businesses. Our focus has been on building a unified payment stack that helps merchants turn these ‘habit payments’ into stronger retention and predictable cashflows, powered by deeply integrated checkout experiences across online and offline touchpoints. The future of payments will be owned by platforms that make every transaction feel intuitive, and we’re committed to powering that transition,” Bharath Katta, Head of Marketing, Easebuzz

Patterned or habitual payments made via UPI represent a seismic shift in how Indians use digital currency, particularly for their most routine small/recurring/consumer everyday transactions and purchases at checkout. While the sheer frequency with which consumers transact via this method today is important, it also reflects consumers' intent and willingness to use UPI for everyday purchases, ranging from groceries to travel to services to routine and impulse purchases at the community level. This shows that consumers are now prepared to transfer money at higher speeds and with less friction—especially when the transaction amount is typically on the lower end.

Sunil Yadav, Chief Information Officer, Satin Creditcare Network, says, "For micro-entrepreneurs, kirana shopkeepers (also known as 'Kike'nas'), gig workers and people who are using UPI for the first time have a newfound way to be able to leverage their ability to transact with total ease and without cumbersome financial mechanisms that were previously unavailable to them. The use of UPI as a means of payment also represents a huge shift in the overall financial behaviour of many of the first-time users of the digital economy in what I would refer to as 'Bharat first' (or geographic)."

Echoing similar views, Rishabh Goel, Founder and CEO, Credgenics, said, "As most small and routine payments - from a kirana store swipe to a cab fare or an EMI - come from UPI, it generates a real-time stream of financial intelligence. It delivers unprecedented visibility into cash flow, spending habits, income stability, behavioral patterns, and, critically, early stress indicators, allowing financial institutions to assess credit risk and customers’ financial health far more accurately than before."

Yadav says for microfinance institutions (MFIs) this trend is viewed as a validation of digital inclusion, in that more first-time borrowers and households are making the transition to using transparent and trackable methods of digital payments; that will continue to bring more transparency to both MFIs and households when it comes to digital transactions – and will ultimately lead to greater access to affordable credit to borrowers. "As the use of habitual and habitual digital payments increases, this also opens up new opportunities for MFIs and banks to better understand borrowers' and household credit behaviour; to reconcile loans more efficiently; to provide AI-enhanced customer service; and at the same time leverage their time and money for maximum efficiency while eliminating bottlenecks," said Yadav.

Seamless UPI has made digital payments almost invisible and instinctive. Goel said, "This shift is reshaping everyday financial habits, strengthening repayment discipline, and giving fintechs the room to innovate with new financial solutions."

This shows UPI is shaping the behavioural backbone of India’s next phase of responsible credit - enabling a more intuitive, inclusive, and data-enriched financial ecosystem. Ultimately, by 2025, the industry will probably mark a milestone where "payments" and "infrastructure" become almost "invisible" to consumers.