Economic Survey 2025–26: UPI and Digital Payments widen the credit accessibility and financial inclusion

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• UPI reached a record 21.6 billion transactions in December 2025.
• UPI transactions hit 228.3B in 2025, value close to Rs 300 lakh crore.
• UPI boosts credit access in smaller towns and for new borrowers.

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The Economic Survey said that India’s Unified Payments Interface (UPI) has a big role in expanding the credit uptake among a new segment of users across smaller towns of the country.

The country's digital payments ecosystem closed 2025 on a record note, with UPI transactions hitting fresh highs in both value and volume in December, reinforcing the platform’s position as the country’s default retail payment rail.

"DPI payment interfaces, such as UPI, provide transaction data to assess creditworthiness," it said, adding that while the expansion of bank accounts is a necessary foundation, it is the effective use of those accounts that ultimately determines whether financial inclusion translates into meaningful

economic opportunity.

A catalyst for change

"A growing body of research shows that a public, interoperable payment infrastructure can play a catalytic role in this transition by converting basic access into active financial participation," the Economic Survey said.

UPI is the world’s largest real-time payments system and processes over 21 billion transactions every month worth more than Rs 27 lakh crore, reflecting deep adoption across consumers and merchants. December 2025 turned into another milestone month, with UPI transaction volumes touching 21.6 billion, the highest ever recorded, surpassing 20.47 billion in November 2025.

Transaction value rose to Rs 28 lakh crore, up from Rs 26.3 lakh crore a month earlier and above the previous peak of Rs 27.3 lakh crore seen in October 2025.

The Economic Survey said that UPI bridges the gap between account ownership and access to formal credit by generating verifiable transaction histories and sharply reducing transaction costs. It also noted the role of fintechs in enabling the credit uptake.

"Digital Public Infrastructure reshapes credit markets by enabling banks and fintechs to expand lending across the risk spectrum, with fintechs playing a distinctive role in reaching new-to-credit borrowers who were previously excluded from formal finance," the Survey said.

Regions with affordable internet and widespread bank account penetration experienced the

strongest credit expansion, underscoring the layered nature of financial inclusion and the complementary roles of incumbents and new entrants.

Economic Survey also noted that the growth in credit linked to digital payments did not come at the cost of higher default rates, the richer transaction data allowed lenders to better identify

underserved but creditworthy borrowers.

"This evidence highlights the power of publicly provided, interoperable infrastructure to support inclusion at scale and to align technological change with macro-level financial development," it added.

Growth remains strong, but the pace moderates

Despite a high base, growth momentum remained resilient through the year. Transaction volumes expanded 29.3 percent year-on-year in December 2025, while transaction value grew 20.3 percent, indicating that expansion is being driven more by deeper penetration and behavioural change than by rising ticket sizes.

December marked the second instance in 2025 where volume growth slipped below 30 percent, suggesting a gradual normalisation in growth rates after several years of rapid expansion, albeit from a much higher base.

A year of sharp scale-up for UPI

Over the full year, UPI’s scale-up has been pronounced. Annual transaction volumes increased from 172.2 billion in 2024 to 228.3 billion in 2025, while transaction values rose from Rs 246.8 lakh crore to Rs 299.7 lakh crore, taking annual digital payments close to the Rs 300 lakh crore mark.

The platform is now embedded across grocery purchases, fuel payments, dining, local mobility, bill payments and a widening range of low-value merchant transactions.