According to the Reserve Bank of India's half-yearly Payment Systems Report, UPI transaction volume stood at 85.5 percent in the second half of 2025, significantly outpacing other digital payment methods. NEFT followed at 3.6 percent, while Prepaid Payment Instruments (PPIs) also recorded 3.6 percent volume. As reported by the RBI, this data demonstrates the clear shift in consumer preferences toward UPI-based transactions in India's digital payment landscape. The report notes that RTGS accounted for a mere 0.1 percent, reflecting its role as a high-value, low-volume system, while NEFT, positioned as a hybrid system capable of processing both small and large transactions with settlement within an hour, holds the second-highest share in both volume and value.
Despite UPI's volume dominance, RTGS handled 68.6 percent of total transaction value in the same period, followed by NEFT at 14.9 percent and UPI at 9.5 percent. According to the RBI report, this distribution pattern clearly illustrates how RTGS continues to handle large-value settlements while UPI drives mass retail transactions. PPIs contributed only 0.1 percent to the total transaction value, highlighting the concentration of high-value payments in traditional banking channels. The report emphasizes that NEFT's versatility and continued relevance in India's evolving payments ecosystem underscores its position as a hybrid system capable of processing both small and large transactions efficiently.
India's digital payments ecosystem has witnessed remarkable expansion over the past decade. According to the RBI report, transaction volumes surged 33 times and values rose by almost 3 times over the 10-year period from 2016 to 2025. Over the most recent five-year period, volumes have grown more than 4 times and values have nearly doubled, translating into a compound annual growth rate (CAGR) of 43 percent in volume and 17 percent in value. The report explains that this growth reflects the nation's rapidly expanding digital landscape, driven by ubiquitous smartphone penetration, transformative public infrastructure such as the Unified Payments Interface (UPI), and growing public trust in secure, seamless cashless transactions.
Rohit Mahajan, Founder & CEO of plutos ONE, emphasized that Indian digital payment systems have evolved beyond traditional preferences to focus on transaction purpose. As reported by Zee News, Mahajan noted that UPI has processed over ₹24,000 crore this fiscal year (FY26), representing 80-85% of all retail digital payments in India. He recommended that consumers choose UPI for everyday spending like groceries and utility bills due to its quickness and simplicity, while debit cards are best for budget control and credit cards are suitable for larger purchases, travel reservations, and reward programs. The expert analysis aligns with the RBI's findings that payment method selection should focus on transaction characteristics rather than defaulting to one payment type.
