India’s digital payments ecosystem expanded sharply in the first half of 2025, led by growth in Unified Payments Interface (UPI) usage and the rapid onboarding of small merchants, according to the India Digital Payments Report (1H 2025) released by Worldline on Wednesday (October 29).UPI transaction volumes grew 35% year-on-year to 106.36 billion, with total transaction value reaching ₹143.34 trillion between January and June 2025.The average ticket size declined from ₹1,478 a year earlier to ₹1,348, indicating the growing frequency of smaller, everyday transactions.
Merchant payments lead growthPerson-to-merchant (P2M) UPI transactions rose 37% to 67.01 billion, reflecting deeper digital penetration among small retailers and local Kirana stores. Worldline termed this shift the “Kirana Effect”, as micro and small businesses increasingly form the backbone of India’s digital acceptance network.QR network doubles, acceptance deepensIndia’s UPI QR network more than doubled to 678 million by June 2025 — a 111% rise since January 2024. The number of point-of-sale (PoS) terminals increased 29% to 11.2 million, while Bharat QR grew 12% to 6.72 million, making India the world’s largest merchant acceptance ecosystem, the report said.
“India’s digital payment story is no longer about convenience — it’s about empowerment,” said Ramesh Narasimhan, CEO – India, Worldline. “From micro-merchants to large corporates, everyone now transacts on the same rails of trust and innovation.”Cards repositioned as premium instrumentsThe report noted that credit cards continue to grow, with outstanding cards rising 23% between January 2024 and June 2025. Monthly credit card spends crossed ₹2.2 trillion, even as average transaction size fell 6%, suggesting broader use across smaller purchases. In contrast, debit card usage at PoS fell 8%, as low-value payments migrated to UPI.Other digital modes gain groundFASTag transactions grew 16% year-on-year to 2.32 billion, while Bharat BillPay (Bharat Connect) transactions surged 76% in volume and 220% in value to ₹6.9 trillion, driven by recurring bill and utility payments.Mobile payments climbed 30% to 98.9 billion transactions worth ₹209.7 trillion, reaffirming India’s transition to a mobile-first payment economy.Next phase of digital paymentsWorldline said the next phase of growth will be powered by biometric and PIN-less UPI, chat-based payments, and the global expansion of UPI corridors. Emerging innovations such as SoftPoS and credit-on-UPI are expected to further strengthen digital acceptance and financial inclusion across new segments.
