UPI at 10: Small-ticket payments and merchant adoption shape India’s retail payment rails
UPI has grown from 21 banks at launch to 741, with low-value purchases driving usage: 86% of FY2025-26 person-to-merchant transactions were below ₹500. The next phase centres on biometric payments, credit-on-UPI, fraud controls and wider merchant onboarding.
What happened
Unified Payments Interface (UPI) · UPI’s tenth-year assessment highlights mass merchant adoption, small-ticket transaction dominance and SBI’s scale. The
Key facts
- UPI expanded from 21 banks in April 2016 to 741 banks
- Transactions rose from about 2 crore in FY2016-17 to over 24,000 crore in FY2025-26
- India accounts for close to half of global real-time payment transactions
- 86% of FY2025-26 person-to-merchant UPI transactions were below ₹500
- SBI handled over 25% of UPI remittances in Q1 FY2027
- SBI UPI users grew from about 210 million in June 2025 to over 250 million in June 2026
- Over 800 million biometric-authenticated UPI transactions worth more than ₹35,000 crore occurred in July 2026
- UPI has a footprint in nine countries
Why this matters
Target partnerships or acquisitions in merchant onboarding, risk intelligence, biometric payments and credit underwriting to capture UPI’s next, trust-led growth phase.
What to watch
- RBI, NPCI or bank announcements on credit-on-UPI product rules, limits, interchange economics and consumer-liability standards.
- Growth in merchant UPI volumes, active QR merchants and the share of person-to-merchant payments below ₹500.
- Adoption of biometric authentication, UPI Lite, feature-phone payment tools and offline payment capabilities.
- Reported fraud rates, transaction-decline rates, payment reversals and new risk-control mandates.
- Whether payment providers bundle merchant lending, reconciliation, loyalty and commerce software around UPI acceptance.
- Make UPI-first checkout the default across store, web, app and assisted-sales channels, with clear fallback paths for cash, cards and failed-payment recovery.
- Connect UPI payment data to order management, loyalty and reconciliation systems to identify repeat customers, reduce manual settlement work and improve cash-flow visibility.
- Pilot compliant credit-on-UPI offers in higher-consideration categories; measure incremental conversion, basket uplift, refund handling and credit-related customer complaints separately.
- Strengthen fraud operations for QR tampering, collect-request scams, refund fraud and account takeover; train store staff on payment-confirmation and social-engineering controls.
- Expand QR onboarding among franchisees, small suppliers and informal-channel partners, while offering assisted biometric or delegated-payment options for inclusion-sensitive customer segments.