India’s digital payments ecosystem is now overwhelmingly powered by tiny, everyday transactions, with UPI accounting for a massive 85.5% of all payment volumes in the second half of 2025, according to the Reserve Bank of India’s latest Payments System Report. In sharp contrast, the Real Time Gross Settlement (RTGS) system processed just 0.1% of transaction volumes but accounted for a massive 68.6% of total payment value.
UPI dominates India’s Payments boom as debit cards lose relevance
But while UPI dominates transaction count, debit card transaction volumes fell from 4.087 billion in calendar year 2021 to 1.336 billion in 2025, a 67% drop over four years. Transaction value also declined from ₹7.4 lakh crore to ₹4.5 lakh crore during the same period.
“While the decline in debit card transactions, both in volume and value, is potentially driven by the rise of digital wallets, UPI, and credit card adoption, debit cards remain more widely held than credit cards,” said the RBI report.
While debit cards are losing relevance in payments, credit cards continue to grow as a premium spending product
In contrast, credit card transactions more than doubled during the same period. Transaction volumes rose from 2.16 billion in 2021 to 5.7 billion in 2025, while transaction value surged from ₹8.9 lakh crore to ₹23.2 lakh crore, growing at an annual rate of around 27%, the report noted.
Private sector banks continue to dominate in the credit card space, focusing on digital and co-branded offerings for customers, as their market share increased from 67.7 per cent (4.8 crore outstanding cards) in December 2021 to 71.1 per cent (8.2 crore outstanding cards) in December 2025. The share of Public Sector Banks (PSBs) witnessed a modest increase, from 23.5 per cent (1.6 crore outstanding cards) to 23.9 per cent (2.8 crore outstanding cards) over the same period. In contrast, the share of foreign banks saw a steep decline, from 9.3 per cent (50 lakh outstanding cards) to 3.8 per cent (44 lakh outstanding cards). Small Finance Banks had issued 14 lakh cards by December 2025.
Unlike in the case of credit cards, PSBs dominate the debit card space, although their market share has declined from 67.9 per cent (63.7 crore cards outstanding) in December 2021 to 63.1 per cent (65.2 crore cards outstanding) in December 2025, partly due to competition in payments posed by UPI.
During this period, however, private sector banks improved their share from 23.5 per cent (19.3 crore cards outstanding) to 25.1 per cent (26.0 crore cards outstanding).
While debit cards are losing transaction share, credit cards continue to grow — though at a slower pace than UPI.
RTGS still moves the “big money”
However, the real money still flows through the banking system’s heavyweight rails: RTGS handled just 0.1% of transactions by volume but accounted for 68.6% of the total transaction value.
Despite dominating everyday payments, UPI contributed only 9.5% of the total transaction value.
In contrast, the Real Time Gross Settlement (RTGS) system — typically used for large corporate and institutional transfers — processed just 0.1% of payment volumes but contributed 68.6% of the overall transaction value.
The numbers highlight how India’s payment ecosystem has split into two layers:
UPI powering mass, low-value retail payments,
and RTGS continuing to dominate high-value money movement.
That indicates Indians are now using UPI for:
grocery purchases,
food delivery,
utility bills,
transport,
small merchant payments,
and peer-to-peer transfers.
India is becoming almost entirely digital
The RBI report shows that digital payments now account for virtually all transactions in the country.
During the first half of 2025:
-
digital payments formed 99.8% of total transaction volume, -
and 97.7% of total transaction value.
The growth has been explosive over the past decade.
Digital transactions in India have:
increased 38 times in volume over 10 years, and more than tripled in value.
In 2013: India recorded 222 crore digital transactions valued at ₹772 lakh crore.
By 2024 that number had surged to over 20,787 crore transactions worth ₹2,758 lakh crore.
UPI is now India’s default payment method
UPI’s dominance has accelerated sharply over the last five years.
Its contribution to India’s digital payment volume rose from:
34% in 2019 to more than 83–85% by 2025.
In the first half of 2025 alone:
UPI processed more than 10,637 crore transactions, worth approximately ₹143 lakh crore.
The growth reflects how deeply UPI has penetrated everyday life — from tea stalls and grocery stores to rent payments and utility bills.
The government recently said UPI processed over 24,162 crore annual transactions worth ₹314 lakh crore during FY 2025-26, making it one of the world’s largest real-time payment systems.
But RTGS still moves the real money
While UPI dominates retail payments, RTGS continues to handle the bulk of large-value transactions.
That is because:
RTGS is mainly used for wholesale banking,
corporate transfers,
institutional settlements,
and high-ticket transactions.
The system requires a minimum transaction amount of ₹2 lakh, naturally resulting in:
very low transaction count,
but extremely high transaction value.
The RBI report also signals a major behavioural shift in Indian payments.
As UPI usage exploded:
debit card usage has stagnated,
while QR-code and account-to-account payments surged.
At the same time:
credit cards continue growing steadily.
By mid-2025:
India had over 111 crore cards in circulation,
including:
around 11 crore credit cards,
and more than 100 crore debit cards.
However, UPI’s convenience, zero-cost transfers and merchant acceptance have increasingly reduced dependence on physical card payments.
India’s digital payment infrastructure is scaling rapidly
The report also points to rapid expansion in supporting infrastructure.
India now has:
crores of QR-code acceptance points,
widespread merchant onboarding,
and increasing rural payment penetration.
UPI now accounts for nearly 49% of global real-time payment transactions, according to government data.
Meanwhile:
BBPS,
IMPS,
NEFT,
and prepaid payment instruments (PPIs)
have all registered strong multi-year growth.