India's digital payments ecosystem continues to scale at a rapid pace, with UPI transaction volumes growing by over 35 percent on year during the first half of the year, a report by Worldline India said on October 29.
The UPI volume reached nearly 106.36 billion transactions in H1CY25. Meanwhile, merchant payments (P2M) through the UPI route expanded faster than person-to-person (P2P) payments, by 37 percent to nearly 67 billion transactions, showed the report, as compared to a 31 percent growth in P2P transactions.
Largest Merchant Network
The network of PoS terminals has grown by 29 percent to 11.2 million since the start of the year, and UPI QRs have more than doubled to 678 million by June 2025, spawning into the world’s largest merchant network. This growth has been fuelled by the rise of micro-merchants, or kiranas and local services across India. The report mentioned that the average ticket size of UPI transactions fell by 9 percent in H1CY25, but the monetary value of the transactions grew by 23 percent on year to close to Rs 143.34 trillion.
"Micro-merchants were the catalyst. Government-backed programs enabled instant onboarding at near-zero cost, while interoperable QR economics removed infrastructure barriers. For shopkeepers, the choice was simple – free rails that offered speed, trust, and reach. Consumers followed with preference, making QR the default over card terminals," said the India Digital Payments report.
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Falling UPI Ticket a 'Superpower'
The report also called the decline in average UPI ticket size from Rs 1,478 in 1HCY24 to Rs 1,348 in 1HCY25 as the 'most striking shift'.
"This is not a weakness; it is UPI's superpower. Smaller spends at kiranas, delivery platforms, mobility services, and utilities demonstrate how QR codes have normalized as the default payment mode," Worldline's digital payment report said. Rising UPI payments for groceries, pharmacies and utilities have 'normalized' QR pay, said the Worldline report, adding that the shift has 'compressed' the average ticket size but 'expanded' the reach.
Shifting Trend in Card Usage
Worldline also noted a shift in the usage profile of card-based payments, where credit card is being used more for higher value or e-commerce transactions, while the use of debit card is shrinking at the merchant level. "The trend divergence highlights the new hierarchy – UPI owns frequency, credit cards capture value, and debit is relegated to cash withdrawals."
Read More: NPCI rolls out UPI payments with fingerprint and face authentication instead of PIN
Mobile First Payments
The report added that mobile payments are becoming default for everyday spending, as 1HCY25 saw volumes reached 98.9 billion transactions, which is higher by 30 percent on year. This growth has been driven by the 'super-app behaviour', wherein consumers are using apps for everyday digital payments.
Net Banking - Explosive Value
Worldline report also said that during 1HCY25, net banking value surged 30 percent to Rs 717.4 trillion, showing its stickiness as the channel of choice for high-value payments. "Corporations, treasuries, and government agencies rely on Net Banking for tax payments, GST remittances, and large-ticket treasury flows," said Worldline, underscoring the dual profile of 'flat volumes, explosive values' as Net Banking’s niche. "For consumers, UPI dominates; for enterprises, Net Banking moves the real money." the report added.
Worldline is a partner for over 30 public and private sector banks, NBFCs, insurers and e-commerce businesses in India.
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