India’s UPI Payment System Continues Rapid Expansion, Records 241.62 Billion Transactions In FY26

September 27, 2026

New Delhi: India’s Unified Payments Interface (UPI) payment system continues to expand rapidly, with annual transaction volumes reaching 241.62 billion in the financial year ended March 2026, highlighting its growing role in the country’s digital economy.

Operated by the National Payments Corporation of India (NPCI), UPI is the world’s largest retail fast-payment system by transaction volume, according to an International Monetary Fund (IMF) report.

UPI Drives India’s Digital Payments Growth

UPI has played a major role in India’s digital payments revolution, helping bring large sections of the population into the formal economy and becoming a key part of everyday commerce.

According to government data cited in the report, annual UPI transaction volume increased from 17.8 million in 2016-17 to 241.62 billion in FY26. Transaction value also increased significantly over the same period, rising from Rs 7,000 crore to Rs 3.14 lakh crore.

A decade after the launch of UPI, discussions are now underway around merchant contributions to help support the long-term sustainability of the system, as banks incur costs to operate and maintain the payment infrastructure.

Focus On Cybersecurity And Global Expansion

The report noted that a predictable revenue stream could encourage banks and payment companies to invest further in cybersecurity, fraud detection and dispute resolution, while also supporting the next phase of UPI’s development.

Potential areas of expansion include credit lines and wider cross-border payment services.

The UPI network is now operational across 11 countries, including Singapore, the United Arab Emirates, France, Mauritius, Nepal, Bhutan, Qatar, Sri Lanka, Cambodia, Greece and Uzbekistan.

Indian tourists, business travellers and students in these countries can make direct person-to-merchant (P2M) payments using their Indian bank accounts, reducing reliance on international cards or cash and helping ease foreign-exchange-related friction.

The international expansion also supports greater cooperation around digital public infrastructure.

The report noted that other countries have adopted different approaches to charging for their digital payment systems. Indonesia, for instance, has rate structures based on merchant category and transaction size, while Malaysia’s DuitNow merchant charges vary depending on the bank or payment provider, with some waivers available.

The underlying challenge remains similar across countries: building and maintaining a secure, large-scale digital payment network involves significant costs.