A fresh policy move in Union Budget 2026 has given digital payments stocks a strong push in the market. Shares of digital payments firms rose after the government announced a ₹2,000 crore incentive scheme for Unified Payments Interface (UPI) and RuPay debit card transactions. The move aims to support the growing digital payments ecosystem.
Shares of One97 Communications Ltd, the parent company of Paytm, jumped by up to 5%, while One Mobikwik Systems Ltd gained 4% during intraday trading.
The proposed allocation is close to the ₹2,196 crore subsidy the government is expected to spend in FY25–26, based on revised estimates. However, it is much lower than the industry’s expectation of around ₹4,500 crore.
Budget documents also showed that the actual subsidy payout in FY24–25 stood at ₹1,923 crore. This level has remained mostly unchanged even as the digital payments ecosystem recorded nearly 70% growth in transaction volumes.
Payment companies say the platform needs around ₹10,000–₹12,000 crore in annual subsidies. This is required to fund digital infrastructure, maintain smooth payment processing, and expand into new user segments.
UPI transactions have continued to hit record levels in both volume and value. Annual growth remains around 30%. In January, UPI transaction volumes crossed 21 billion, while transaction value went beyond ₹28 lakh crore.
The market reaction shows investor confidence that continued government support could help payment firms manage costs and expand services, even as transaction volumes keep rising sharply.
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