India Goes Nearly Cashless as UPI Becomes Operating System for Money
As paper instruments phase out, cards, NEFT, and NACH play second fiddle to UPI in one of the world’s fastest-scaling payment ecosystems.
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Digital payments made up 99.8% of all payment transactions by volume and 97.7% by value in January–June, the Reserve Bank of India said in its half-yearly review released on Thursday.
The report logged 125.50 billion transactions worth ₹1,572 trillion ($17.9 trillion) across systems amid a retreat of cheques and other paper instruments in everyday use.
UPI remained the backbone of retail payments as it processed 106.37 billion transactions worth ₹143.3 trillion in the first half, reinforcing its lead in person-to-person and merchant flows. About 85% of India’s digital transactions now ride on UPI.
Cards held their ground at much smaller scale by count. Online merchant payments on cards continued to rise even as debit-card swipes lagged with users shifting to mobile and tokenized options. NACH expanded as a staple rail for salaries, pensions and subsidies, with value touching ₹21.4 trillion, while NEFT stayed a preferred route for mid-value transfers.
AePS and BHIM Aadhaar Pay together climbed from 9.26 million transactions in 2019 to 23.97 million in 2024, with value up from ₹1,610.55 crore to ₹7,102.06 crore. In the first half of 2025, they handled 10.8 million transactions worth ₹3,545.19 crore, pointing to wider uptake in rural and semi-urban markets.
Cross-border connectivity is moving from pilots to plumbing. India already runs a live UPI–PayNow link with Singapore and is a core partner in BIS’s Project Nexus, which is building a multilateral switch to connect instant payment systems across India, Singapore, Malaysia, the Philippines and Thailand.
Central banks incorporated Nexus Global Payments in Singapore this year to take the scheme live.
The RBI paired the growth story with cautions on fraud and resilience. As volumes scale, banks and fintech firms must step up real-time fraud detection, cyber defence and interoperability hygiene, the report said. Recent regulatory updates on authentication also clear room for risk-based checks to strengthen security without adding friction.
