India’s Digital Payments Surge: New Report Unveils Key Trends

The Department of Financial Services (DFS) of the Ministry of Finance has unveiled a comprehensive report on the socio-economic impact of its incentive scheme aimed at promoting the RuPay debit card and low-value BHIM-UPI transactions. Conducted during the Chintan Shivir held on February 13-14, 2026, the report highlights the substantial growth and transformative effects of digital payment initiatives across India.

This in-depth analysis was commissioned from an independent third-party research agency and involved close collaboration with the National Payments Corporation of India (NPCI). It assesses the effectiveness of the government’s incentive framework designed to encourage digital payments, bolster payment infrastructure, and enhance financial inclusion nationwide.

Empowering Digital Payments

The incentive scheme, which started in the fiscal year 2021-22 and extends through FY 2024-25, aims to foster the widespread acceptance of digital payments. The government intends to minimize cash reliance and formalize economic activities. Financial support has been systematically provided to acquiring banks and ecosystem participants to ensure digital payments remain affordable and accessible.

Survey Insights and Impact

Key findings from the analysis, based on surveys of over 10,000 participants across 15 states, show a pronounced shift towards digital payments. UPI has emerged as the leading transaction mode, utilized by 57% of surveyed users, which surpasses cash usage at 38%. Most notably, 65% of UPI users reported conducting multiple transactions daily, with the 18-25 age group leading the pack at a remarkable 66% adoption rate.

Furthermore, 90% of users expressed increased confidence in digital payments after utilizing UPI and RuPay cards. The report reveals that 52% of users were motivated by cashback incentives, while 74% highlighted the speed of transactions as a major benefit.

Merchants have also embraced digital payments, with 94% of small merchants now accepting UPI. Among them, 72% reported satisfaction with digital transactions, citing advantages such as improved record-keeping and operational convenience. Notably, 57% observed an uptick in sales post-adoption.

Significant Growth in Digital Infrastructure

The study recorded a nearly 11-fold increase in digital transactions, with UPI’s share skyrocketing to approximately 80% of total digital activities. This rise went hand-in-hand with significant growth in UPI QR code deployments, expanding from 9.3 crore to around 65.8 crore, further enhancing merchant acceptance across the country.

The government allocated ₹8,276 crore to support the scheme, with total incentive disbursements covering 2021-2025 to aid scaling of low-value digital transactions. Beyond just transaction growth, the findings underscore broader economic benefits such as increased formalization, transparency, and improvements in business efficiency.

Charting the Path Ahead

The report concludes with recommendations for targeted efforts to improve RuPay debit card usage, especially in rural areas. Initiatives include focused merchant training programs and continued investments in digital literacy and infrastructure.

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