India has significant room to expand digital payments, with the Unified Payments Interface (UPI) having the potential to grow to over 1 billion users from the current base of around 400 million, Reserve Bank Deputy Governor T Rabi Sankar said on Tuesday.
Speaking at the Global Inclusive Finance India Summit, he said that while India accounts for nearly 50% of global retail payment transactions, the country still lags behind several advanced economies in terms of digital transactions per person. Citing Kenya as an example, he noted that the number of digital transactions per person there is roughly double that of India.
UPI, developed and operated by the National Payments Corporation of India, an RBI-promoted body, has played a key role in driving this growth. Soon after its launch for smartphone users in 2016, a USSD-based service was also introduced to extend UPI access to feature phone users.
” The active users of UPI are about 400 million. We are targeting 1 billion users. So…there is a lot of scope, there is a lot of distance that we need to travel,” Rabi Sankar said.
He added that the rapid spread of digital payments has transformed the country’s financial ecosystem and strengthened financial inclusion. As an example, he said a housewife can now operate a small business from home using UPI, as the payment process is secure and reliable.
Quoting a study, the Deputy Governor said a 10% rise in digital payments could lead to a 0.3% increase in GDP. On cyber security, he said the Reserve Bank has taken several steps, including initiatives like mule hunter, to curb digital fraud.
Digital payments have seen sharp growth due to coordinated efforts by the government and stakeholders. The total value of digital payment transactions rose from ₹2,071 crore in FY 2017–18 to ₹22,831 crore in FY 2024–25, recording a CAGR of 41%.
UPI has emerged as the most preferred payment mode, supporting both person-to-person and person-to-merchant transactions. About 81% of total retail payment transactions by volume in India are now processed through UPI.
UPI also allows multiple bank accounts to be linked to a single mobile application. The Reserve Bank is enabling UPI linkages with fast payment systems of other countries. Such integration is live with Singapore since February 2023, while similar projects with the UAE and Nepal are underway.
Indian UPI apps are now accepted via QR codes in Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, the UAE, and Qatar, helping Indian travellers make payments abroad.
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