Aim: This study looks at the Unified Payments Interface’s (UPI) expansion and uptake in India and assesses its impact on financial inclusion and the development of the digital economy.
Methodology: The methodology adopted a descriptive and analytical design based on secondary data. The research entailed the longitudinal analysis of UPI transactions’ official data for nine financial years (FY2017-18 to FY2025-26), along with a critical analysis of fourteen journal articles and RBI’s survey results on digital payments in the entire country. Analysis of transaction number, transaction value, yearly growth rate, CAGR and average transaction value was done using Microsoft Excel.
Results: The UPI transaction volume went up from 92 crore in FY2017–18 to 24,161.69 crore in FY2025–26, while the value went up from ₹1.10 lakh crore to ₹314.20 lakh crore. For the year FY2025–26, there was an increase of 30.0% in the volume, 20.6% in the value and the UPI transactions made up for almost 86% of the retail-payment transaction volume. The survey by the RBI showed digital payment adoption by 52% of the users and acceptance by 67% of the merchants. The factors which contributed to the adoption were usefulness, ease of use, facilitating conditions and trust.
Conclusion: The UPI system has been instrumental in laying the basis for payment infrastructure and increasing financial inclusion through better uses of formal banking accounts in transactions. Yet, transaction volumes by themselves are insufficient to achieve full financial inclusion. To do so, autonomy in use, connectivity, consumer protection, remediation and access to savings, credit and insurance products are necessary.