How UPI is redefining real-time payments for a digital bharat

By Puja Sharma

India’s Digital Payment Revolution: UPI’s Unstoppable Growth and Global Aspirations

India’s digital payments landscape is undergoing an unprecedented transformation, with the Unified Payments Interface (UPI) emerging as the dominant force driving financial inclusion, merchant adoption, and cross-border transactions. According to a new industry report, “Crafting the Future of Real-Time Payments: From Less Cash to Cashless” by The Digital Fifth, UPI now drives 84% of all digital transactions in India, solidifying its reputation as a technological marvel and a model for digital-first economies worldwide. The report underscores UPI’s transformative impact on businesses and consumers while highlighting the critical infrastructure innovations needed to sustain this momentum as India progresses toward a cashless future.

According to Sameer Singh Jaini, Founder & CEO of The Digital Fifth, UPI represents more than just a payment system—it’s an entire financial ecosystem shaping India’s digital-first economy. He noted, “UPI has evolved from a simple real-time fund transfer system into the backbone of India’s digital economy—democratising access, driving merchant adoption, and powering cross-border transactions. With UPI handling 16 billion transactions a month and projected to grow 3x by the end of 2030, the role of robust, high-resilience switching infrastructure becomes paramount. Real-time fraud detection, cloud-native architecture, and scalable, dual-core switches are no longer optional; they are essential to ensuring frictionless, secure, and fail-proof digital payments as India continues its journey toward a truly cashless, globally connected economy.”

As UPI continues to scale globally, industry leaders, regulators, and FinTechs must work together to fortify security, improve interoperability, and drive financial inclusion. With embedded finance, AI-powered fraud detection, and seamless cross-border payment integrations, India is well on its way to becoming a leader in the next era of real-time digital payments.

Headquartered in Mumbai, The Digital Fifth is a digital transformation provider in the banking, financial services and insurance companies. It provides strategy consulting, digital advisory service, digital program management, technology strategy and advisory, risk and compliance and corporate training.

Key Findings:

UPI’s Explosive Growth:

• UPI transactions surged 4x from 2021 to 2024, reaching 172 billion transactions annually. It now dominates digital payments, far outpacing card-based and wallet transactions.

Merchant Adoption at Scale:

• With 30 million+ merchants onboarded on UPI, the merchant-to-consumer (P2M) segment is growing at 67% YoY, outpacing peer-to-peer (P2P) transactions and signaling UPI’s transition into the primary retail payment system.

New Innovations Powering UPI Expansion:

• UPI Credit & Embedded Finance: Unlocking access to credit for MSMEs and consumers.
• UPI LITE & Offline-Based Payments: Enhancing financial inclusion in rural areas.
• Cross-Border UPI Transactions: Expanding UPI’s global footprint in UAE, Singapore, France, and Sri Lanka.

Infrastructure Challenges & the Future of UPI:

• As monthly UPI transactions hit 16 billion and are projected to reach 3x by 2030, ensuring high-resilience, AI-driven fraud detection, and cloud-native transaction processing is critical to preventing system bottlenecks.