A recent report by PwC India indicates that Unified Payments Interface (UPI) transactions in India are expected to reach 1 billion per day by 2026-27, constituting around 90% of the country’s retail digital payments.
UPI has been the driving force behind the digital payments revolution in India and accounted for approximately 75% of the total transaction volume in the retail segment during the period of 2022-23.
UPI Transactions in India Are Expected To Reach 1 Billion per Day by 2026–27
The report forecasts that UPI will continue to dominate the retail digital payments landscape in the next five years, representing 90% of the total transaction volume. This reflects the growing popularity and convenience of UPI-based transactions among Indian consumers.
The Indian digital payments market has been experiencing a steady growth rate, with a compound annual growth rate (CAGR) of 50% in terms of transaction volume.
The report predicts that the market will witness a significant increase, reaching 411 billion transactions in FY 2026-27, compared to 103 billion transactions in FY 2022-23.
Credit Card Segment Is Showing Promising Growth
In particular, the credit card segment is also showing promising growth, as credit and debit card payments remain widely used instruments for retail digital payments, following UPI. The report suggests that credit card transactions are expected to surpass debit card transactions by FY 2024-2025.
Furthermore, the report highlights that the decline in debit card usage can be attributed to the fact that UPI offers a more convenient alternative for cash withdrawals, which was one of the primary use cases for debit cards.
As per the report, “The decline in debit card usage is because the major use case of debit card transactions is cash withdrawal, which can now be replaced by an easier way of withdrawing cash using UPI.”
Payments Industry To Focus on Expanding The Ecosystem
The report emphasizes that the payments industry will focus on expanding the ecosystem and exploring new use cases for existing payment platforms.
It highlights areas such as embedded and ecosystem finance, digital lending based on payment transactions, and offline payments as potential drivers for the industry’s future growth.
Mihir Gandhi, Partner and Payments Transformation Leader at PwC India, expects that innovation and inclusion will play a crucial role in shaping a seamless digital economy in India.
The report also highlights the revenue potential in the credit card business, with credit card issuance projected to grow at a CAGR of 33% over the next five years, making it an attractive segment for banks, NBFCs, and fintech companies.
