UPI marks 10 years as merchant payments drive 63% of transaction volume
UPI processed more than 24,162 crore transactions in FY2025-26 and accounted for 84% of India’s digital-payment volume. With 741 banks live and person-to-merchant payments comprising 63% of volume, the network is increasingly central to retail checkout infrastructure.
What happened
Unified Payments Interface (UPI) · UPI marks 10 years with more than 24,162 crore annual transactions in FY2025-26, 741 participating banks and 84% of India’s
Key facts
- UPI completes 10 years on Aug. 25
- Annual transaction volume rose from 1.78 crore in FY2016-17 to over 24,162 crore in FY2025-26
- Transaction value rose from Rs 0.07 lakh crore to around Rs 314 lakh crore
- Average 66 crore daily transactions in 2026
- 2,366 crore transactions worth Rs 29.88 lakh crore in July 2026
- 741 banks live as of July 2026
- Person-to-merchant transactions account for 63% of volume
- 84% of India's digital payments in FY2025-26
- Operational in 11 countries
Why this matters
Prioritize partnerships or acquisitions in UPI-enabled checkout, merchant acquiring, reconciliation, and data-led loyalty capabilities to capture India’s expanding retail payment ecosystem.
What to watch
- Sustained growth in person-to-merchant UPI share versus peer-to-peer transfers.
- UPI transaction-value growth relative to transaction-volume growth, indicating movement into larger retail baskets.
- Adoption and regulatory expansion of credit on UPI, including issuer participation, limits and merchant discount structures.
- UPI payment failure rates, peak-period outages and refund-resolution times at major banks and payment service providers.
- Changes to MDR, interchange, merchant subsidies or government support for UPI acceptance.
- Merchant adoption of dynamic QR, UPI intent flows, tap-and-pay and interoperable in-store payment devices.
- Fraud-loss trends, mule-account controls and customer-authentication requirements that add checkout friction.
- Make UPI payment success rate, payment-to-order conversion and refund completion core checkout KPIs by app, store format and customer cohort.
- Upgrade QR deployments from static acceptance tools to integrated POS, order management, loyalty and CRM identifiers.
- Test UPI-linked merchant offers, instant cashback and bank-partner promotions against card-led discount programs; measure incremental margin rather than gross GMV.
- Build payment fallback flows for UPI outages or bank declines, including card, wallet and deferred-payment alternatives.
- Prepare for higher-frequency reconciliation by automating settlement, refunds, chargeback-like dispute handling and store-level exception management.
- Segment tender strategy: use UPI for routine baskets and operational efficiency, while preserving card and EMI flows for premium and high-ticket categories.