India’s digital payments network continued its strong growth in the first half of FY27, with (Unified Payments Interface) UPI transactions rising 27% to around 145 billion, according to data from the National Payments Corporation of India (NPCI).
UPI transaction value also increased 20% to Rs 177 lakh crore between April and September, compared with Rs 148 lakh crore during the same period of the previous financial year. The growth reflects continued higher usage across person-to-person and merchant payments.
September recorded 24.07 billion UPI transactions, down 1.8% from 24.5 billion in August. Transaction value also declined 1.5%, falling from Rs 29.82 lakh crore in August to Rs 29.37 lakh crore in September.
Despite the monthly decline, average daily transaction volumes increased. September recorded around 802 million transactions per day, compared with 791 million in August. September had fewer calendar days than August, contributing to the difference between monthly and daily figures.
NPCI’s monthly statistics show that UPI processed 22.35 billion transactions in April, 23.20 billion in May, 22.72 billion in June, 23.66 billion in July and 24.51 billion in August 2026.
The latest figures come ahead of the scheduled introduction of a merchant discount rate (MDR) on certain high-value UPI transactions from October 15. Under the framework cited in reports, merchants will pay a 0.4% MDR on UPI transactions above Rs 2,000, while person-to-person transactions will remain outside the charge.
The MDR will be paid by merchants and not consumers. It will be capped at Rs 300 for transactions of Rs 75,000 or more. The reported distribution of the MDR is 40% to customers’ banks, 30% to payment gateways, 20% to UPI apps and 10% to the sponsoring bank of the UPI app.
Some categories will have separate charges. Essential services, including railways, telecom, fuel and insurance, will attract a flat Rs 5 fee on transactions above Rs 2,000. Capital-market transactions such as mutual funds and stockbroking will carry a 0.02% rate, also capped at Rs 300.
Small merchants collecting up to Rs 1 lakh per month through UPI QR codes will remain exempt from the new charge. The exemption is reported to cover around 96% of merchant transactions.
UPI is now accepted in 11 countries, with Uzbekistan being the latest addition. The other countries are Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia and Greece.
Launched in August 2016, UPI has expanded significantly over the past decade. Transaction value rose from Rs 0.07 lakh crore in FY17 to around Rs 314 lakh crore in FY26, representing an increase of more than 4,000 times.
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