UPI Logs Another Record Year, Transactions Cross 22,000 Cr Mark In 2025

India’s digital payments system, Unified Payments Interface (UPI), continued to scale in 2025, recording over 22,000 Cr transactions. It processed transactions worth INR 299.76 Lakh Cr last year.

As per the data released by the National Payments Corporation of India (NPCI) for UPI in December 2025, total transactions rose 5.7% to 21.63 Bn from 20.47 Bn in November 2025. These transactions were worth INR 27.97 Lakh Cr. Meanwhile, the average daily transaction count stood at 698 Mn with an average value of INR 90,217 Cr during the month. Notably, UPI transactions touched a fresh all-time high last month.

Commenting on the growth in UPI transactions, PayNearby founder and MD Anand Kumar Bajaj said, “This massive growth has been driven by a surge in QR and UPI-acceptance across towns and villages, increasing adoption with real-time digital payments among merchants and consumers, and the continuous strengthening of the infrastructure by banks and fintechs.” 

While PhonePe and Google Pay continued their duopoly in the UPI market, 2025 also saw smaller players like Sachin Bansal-led Navi, Kunal Shah’s CRED, and Flipkart-backed super.money see a rise in transactions and market share. 

Notably, the year began with the NPCI delaying the deadline for the implementation of a 30% cap on the market share of third-party app providers (TPAPs), such as PhonePe and Google Pay, to December 2026. Barring any major disruptions, PhonePe and Google Pay are expected to retain the top two spots this year as well. 

Amid all these, there were also renewed speculations about the introduction of a merchant discount rate (MDR) on UPI payments. The Payments Council of India (PCI) wrote to Prime Minister Narendra Modi, asking to allow charging MDR on large merchants for transactions above INR 2,000.

The payments industry, including many fintechs, have long argued that the inability to monetise UPI offerings has resulted in loss-making apps which are struggling to keep up with the maintenance and expansion costs. 

Notably, UPI faced multiple brief outages this year. However, the government was quick to reject whispers of levying MDR on UPI transactions, calling them speculative, baseless and misleading. Finance minister Nirmala Sitharaman also called on UPI ecosystem players to address infrastructure gaps to reinforce UPI’s robustness and prevent future disruptions. 

Meanwhile, UPI continued to see global expansion and addition of new features last year. 

UPI’s Next Leap: AI Integration & Global Expansion

The two key areas for NPCI when it comes to UPI in 2025 were integration of AI and overseas expansion of the digital payments system. 

In 2024, UPI went live in several countries like Nepal, Qatar, Peru and Singapore. Continuing the expansion spree, UPI was integrated with the Qatar National Bank (QNB) last year to roll out the service in the Middle Eastern country.

Later, the payments body also entered into an agreement with Namibia’s central bank to help the country build a real-time payments system similar to UPI. 

Last month, NPCI International (NIPL) partnered with Cambodia’s ACLEDA Bank Plc to introduce UPI in Cambodia.

The vision to take UPI abroad was also supported by leading digital payment players this year. For instance, Vijay Shekhar Sharma-led Paytm rolled out UPI access for NRIs in 12 countries with the beta version of the feature available in the US, the UK, the UAE, Singapore, Australia, Canada, France, and Saudi Arabia currently. 

Similarly, US-based PayPal partnered with the international arm of NPCI to build a global digital payment platform called PayPal World. Using PayPal World, users will be able to pay international business or send money overseas by using their native payment system.

Japan’s NTT DATA, Razorpay’s Malaysia-based subsidiary Curlec, Bahrain’s BENEFIT Company are among the other entities with which NIPL partnered last year for acceptance of UPI payments.

Besides, the NPCI took steps towards integrating AI with UPI for further increase in the usage of the digital payments system. 

In June last year, finance minister Sitharaman said that the authorities were working on developing conversational payments using AI and offline functionality with an aim to facilitate transactions through natural language conversation.   

The NPCI showcased the pilot of an agentic AI framework for UPI during the Global Fintech Fest (GFF), marking the next phase of “intelligent commerce”. The demo showed how user-authorised AI chatbots and agents could discover, decide, and complete payments through UPI using contextual triggers, voice or text commands, and user-defined routines. 

The payments body is also working on an internet of things (IoT) version of UPI which will allow users to make digital payments via smart devices like smart appliances, wearables, connected cars, among others. 

“Looking ahead, the next wave of growth will come from expanding UPI’s use cases including credit‑on‑UPI, recurring payments and mandate-based payments via improved UPI AutoPay, micropayments through UPI Lite (even in low-connectivity zones), and payments via IoT/connected devices beyond smartphones,” Bajaj said.

The NPCI took steps in 2025 to not only expand the use cases but also reduce the transaction time for further growth in UPI usage.

UPI’s 2025 Makeover & The Path Ahead 

From new mandates to feature roll outs, UPI went through a full blown makeover this year. Starting off, NPCI unveiled a new mandate for UPI to reduce the response time for processing the payments. 

Under it, remitter banks, beneficiary banks and payer and payee payment service providers (PSPs) were required to reduce response time for UPI APIs initiated by the NPCI to as low as 10 seconds for certain transactions. 

Besides, the NPCI rolled out the following two new features at the GFF 2025: 

• UPI Reserve Play: Allows users to reserve or lock a portion of their credit card limit or approved credit line for future UPI payments. The feature offers better spending control and transparency while making credit-based UPI payments.
• UPI Help: It introduces an AI-driven support system for transaction status checks, complaint filing and tracking, and mandate management.

“Consumers today demand speed and an effortless payment experience, and UPI is introducing ways to provide those two things. Following the success of credit on UPI, NPCI has now made EMI on UPI live. It will allow users to convert large purchases into easy and flexible installments. This innovation is set to redefine affordability for millions and will be a powerful catalyst in helping the RBI reach its goal of 1 Bn UPI users by December 2029,” said Kiwi founder Anup Agarwal.

Looking ahead, the NPCI will continue pushing for new features to further increase the penetration of UPI and double down on integration of AI to bring new users to the UPI ecosystem in 2026.

[Edited By Vinaykumar Rai]