Is UPI transforming India’s economy? Check latest FY25 data

New Delhi: Nirmala Sitharaman on Monday said the Unified Payments Interface (UPI) accounted for around 81 per cent of total retail digital payment transactions in FY25, reinforcing its position as the largest real-time retail payment system in the world.

In a written reply to questions in the Lok Sabha, the finance minister highlighted the rapid growth of digital payments in India, driven by government initiatives and the expansion of digital infrastructure.

Retail digital payments see rapid growth in India

According to the minister, the volume of retail digital payment transactions increased sharply from 7,176.9 crore transactions in FY22 to 22,167.9 crore transactions in FY25, reflecting the country’s accelerating shift towards cashless transactions.

In terms of value, digital payment transactions rose from ₹457.44 lakh crore in FY22 to ₹849.12 lakh crore in FY25, indicating strong growth in both transaction volume and monetary value.

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The minister noted that digital payments have expanded consistently over the past three financial years. Transaction volume increased by 58.42 per cent in FY23, followed by 44.39 per cent in FY24 and 35.04 per cent in FY25.

Similarly, the value of digital payment transactions recorded growth of 28.41 per cent in FY23, 22.47 per cent in FY24 and 18.04 per cent in FY25.

Factors driving India’s digital payment boom

Sitharaman said the expansion of UPI-based transactions and digital payment adoption has been supported by several factors, including the rapid spread of smartphones, Aadhaar-based authentication, e-KYC processes, wider financial inclusion and the growing network of merchants accepting digital payments.

The growth has been facilitated through coordinated efforts by institutions such as the Reserve Bank of India and the National Payments Corporation of India (NPCI), alongside government initiatives aimed at promoting a digital economy.

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Cybersecurity challenges remain

While highlighting the success of digital payment systems, the minister also pointed out emerging challenges linked to the rapid expansion of digital transactions.

These include cybersecurity risks, digital literacy gaps, uneven adoption of digital technology and network-related issues, which could affect user safety and accessibility.

To address these concerns, the government, RBI and NPCI have introduced several safeguards to strengthen digital payment security and fraud prevention.

The RBI and banks are also conducting awareness campaigns through SMS alerts, radio messages and public outreach programmes to educate users about safe digital payment practices and reduce cyber fraud risks.

IANS