“This is not a weakness. It is UPI’s superpower. Smaller spends at kiranas, delivery platforms, mobility services, and utilities demonstrate how QR codes have normalized as the default payment mode,” Worldline, a leading omnichannel payments technology player, said.
QR boom redefines India’s merchant network
“India’s payments acceptance story has undergone a dramatic shift in the last 18 months. PoS (Point of Sale) terminals grew 29% to 11.2 million (1.12 crore) from 8.6 million (86 lakh) in January 2025, Bharat QR rose 12% to 6.72 million (67.2 lakh) from 6 million (60 lakh) in January 2025, and UPI QRs more than doubled from 321.38 million (32.14 crore), up 111% to 678 million (67.8 crore) by June 2025,” the report said.
“What began with scattered QR codes has scaled into the world’s largest merchant network. Micro-merchants were the catalyst. Government-backed programs enabled instant onboarding at near-zero cost, while interoperable QR economics removed infrastructure barriers. For shopkeepers, the choice was simple – free rails that offered speed, trust, and reach. Consumers followed with preference, making QR the default over card terminals,” Worldline stated.
Supporting data highlighted the scale. The RBI (Reserve Bank of India) and NPCI (National Payments Corporation of India) recorded 1840 crore UPI transactions in June 2025 alone, underscoring how digital acceptance has become mainstream. While traditional acceptance points expanded steadily, the sheer velocity of UPI QR adoption has reshaped the entire market.
The kirana effect: Small spends, massive scale
“The implications are far-reaching. Biometric and PIN-less UPI pilots promise to unlock frictionless adoption for elderly users and feature-phone segments, signalling the next inclusion frontier,” Worldline said. “As adoption broadens, the challenge will be to balance ubiquity with sustainability while continuing to innovate for inclusion,” it said.
“For merchants, onboarding is near frictionless, with zero-cost acceptance and instant settlement. For consumers, speed and trust often outweigh the use of cards or cash. UPI has become not just a payment option, but an infrastructure layer for everyday commerce,” Worldline stated.
India’s UPI engine is powered by two primary flows – P2P (Person to Person) transfers and P2M (Person to Merchant) payments. In H1 2025, P2P transactions grew 31% y-o-y to 3935 crore, while P2M transactions surged 37% y-o-y to 6701 crore.
“This tilt toward merchant payments reflects how groceries, pharmacies, food and beverage, and utilities have normalized QR pay. The shift compressed average ticket sizes but expanded the system’s reach,” Worldline said.
“The P2M surge is structural, not temporary. What once relied on cash or cards is now digital by default at kirana stores and neighborhood merchants. This ‘kirana effect’ proves that ubiquity is built on countless small-value transactions rather than a few large swipes,” it said.
The scale is undeniable. P2P transaction value climbed 22% y-o-y to ₹103.86 lakh crore, while P2M surged 26% y-o-y to ₹39.48 lakh crore. “Hyper-local spends are driving frequency and stickiness. For consumers, digital is now a habit. For merchants, it delivers low-cost acceptance that builds trust and liquidity simultaneously,” Worldline stated.
In all, three UPI apps are dominant in terms of volume and value—PhonePe, Google Pay, and Paytm. In terms of transaction volumes, in June 2025, the three apps accounted for 90.4% of all transactions. In terms of transaction value, the trio accounted for 91% of the spends in June 2025.
With widespread QR code adoption among kirana stores and small merchants, as well as growing comfort among consumers in using UPI for frequent, low-value transactions increasing at a rapid pace, the decline in ticket size has raised questions around sustainability and merchant economics.
“The digital rails must balance high volume with low margin for long-term viability. As UPI scales deeper into both micro and credit-led flows, policymakers and acquirers must align incentives to ensure sustainability. For now, the kirana remains UPI’s beating heart, millions of tiny taps creating an unmatched digital scale,” Worldline stated.
Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.
