India's digital payment infrastructure has entered a phase of deep structural maturity, with the Unified Payments Interface (UPI) now firmly at the core of the country's retail payments architecture, according to a new report by CareEdge.

The report noted, "digital payments now account for 93 per cent of payment value and 99.8 per cent of transaction volume as of 9MFY26." As per the report, traditional payment instruments such as debit cards and prepaid instruments are currently stable or in decline mode, as Unified Payments Interface (UPI) continues to substitute for low-value transactions across the country.

While UPI maintains a commanding lead in volume, other systems, including NEFT, IMPS, and NACH, remain essential to the financial ecosystem, particularly for high-value and bulk payments. Data from the report shows that NEFT continues to be a crucial tool for mid-to-high-value transactions.

As of January 2026, the average ticket size for NEFT stands at approximately ₹48,289, a figure that is significantly higher than the average UPI ticket size of ₹1,298 recorded during the same period."UPI has become the default rail for retail payment volumes, rising from 73.6 per cent in FY23 to 86 per cent in FY26E, with other modes now marginal," the report stated.

The report highlighted that the ecosystem is rapidly converging toward the UPI infrastructure, with continued headroom for share expansion in the coming years.

"UPI has emerged as a global leader, accounting for nearly 49 per cent of global real-time payment volumes, and powers the world's largest real-time payment system in India. UPI has transformed domestic payments and is now expanding internationally with presence across multiple countries and over 2 million international merchants, setting the benchmark for digital payment systems worldwide," said Tanvi Shah, Senior Director at CareEdge Advisory.

The shift in consumer behaviour is particularly evident in the decline of specific physical instruments. While credit cards remain a popular choice for e-commerce and high-value purchases, debit cards and Prepaid Payment Instruments (PPIs) are losing ground to UPI for smaller, day-to-day transactions.

This trend is supported by ongoing efforts from the Indian government and the Reserve Bank of India to promote digital adoption.Initiatives such as the Payments Infrastructure Development Fund (PIDF) are currently accelerating digital payment penetration in underserved regions, specifically targeting Tier- II and Tier- III cities.

Meanwhile, IMPS is experiencing steady growth but continues to lag behind UPI, which offers a similar instant payment experience but with much broader merchant acceptance. NACH transactions also remain vital for the economy, serving as the primary vehicle for bulk disbursements such as salaries, subsidies, and dividends. "NEFT and IMPS still dominate with a majority share, but their share has declined gradually compared to FY23. UPI (including BHIM) has emerged as a key driver of structural growth, increasing its value share," the report stated.

Published on April 7, 2026