India's Unified Payments Interface (UPI) is experiencing a record-breaking October, fueled by Diwali sales and recent GST (Goods and Services Tax) reductions. Data from the National Payments Corporation of India (NPCI) indicates a significant surge in transaction volumes and value, pointing towards a robust festive season for digital payments.
The average daily transaction value in October has jumped 13% compared to September, reaching ₹94,000 crore. This surge indicates one of the strongest month-on-month growth trends for UPI in recent years. Experts predict that UPI may reach its highest-ever monthly performance and the monthly transaction value may cross ₹28 lakh crore for the first time, exceeding the existing record of ₹25 lakh crore.
UPI has cemented its position as the dominant payment method, powering nearly 85% of all digital transactions in India. The platform's daily transaction volumes have also reached new peaks. On Diwali eve, UPI processed an all-time high of 740 million transactions in a single day. The average daily volume for October so far is 695 million transactions, up over 6% from September's 654 million.
The growth in UPI transactions can be attributed to increased spending during Diwali and the government's recent GST rate cuts on certain goods and services. The GST rate reductions, implemented in September, have put more disposable income in the hands of households, boosting their spending ability.
During the Dhanteras-to-Diwali period, average UPI volumes jumped to 737 million each day, up from 568 million last year, marking a 30% increase in transaction count. However, the growth in transaction value was a more modest 2.7%, totaling ₹87,569 crore, suggesting a rise in low-value, high-volume transactions for everyday and merchant payments. This indicates UPI's expanding reach across various retail categories.
While UPI dominates the digital payment landscape, credit cards have maintained a strong presence in e-commerce. Online credit card usage surged 22% year-on-year, outpacing in-store transactions, with e-commerce volumes reaching 4.8 million transactions compared to 4.2 million point-of-sale swipes. In contrast, debit card transactions continued to decline, with point-of-sale volumes down 11% and value down 9%. Prepaid payment instruments like digital wallets and gift cards experienced even steeper declines.
UPI transactions have tripled in the last four years, from 245.4 million in 2022 to 736.9 million in 2025. The value of UPI payments during the Diwali season has more than doubled in three years, from ₹43,785 crore in 2022 to ₹87,569 crore this year. This growth is part of a larger trend of UPI's exponential expansion, with monthly transactions in October 2024 reaching ₹23.50 trillion across 16.58 billion transactions.
UPI's success can be attributed to several factors, including its ease of use, interoperability, and widespread acceptance by merchants. As of September 2025, over 400 million merchants accept UPI payments. Small retail businesses account for nearly 40% of merchant payment volume, demonstrating UPI's growing adoption among kirana shops and micro-enterprises. Government programs under Digital India have also contributed to increased trust and usage across demographics.
Looking ahead, industry experts anticipate that UPI transactions may reach 25 billion per month towards the end of 2025. UPI's global expansion, with its presence in seven countries, further solidifies its position as a leading digital payment platform.
