India digital payments surge as UPI hits record transaction volumes

Digital payment volumes in India have reached significant milestones, driven by the expansion of the Unified Payments Interface (UPI) and credit card integration. In August, UPI processed a record 24.51 billion transactions valued at Rs 29.8 lakh crore, a 22 per cent annual increase in volume. This surge was partially attributed to festive activities such as Raksha Bandhan.

Concurrently, credit card usage patterns are shifting. In July 2026, credit card transactions rose by 24.1 per cent year-on-year to 601 million. However, the average expenditure per transaction fell by 13.5 per cent to Rs 3,460, as total spending grew by only 7.4 per cent. Analysts suggest this decline in average transaction size is linked to the rise of low-value RuPay credit card-linked UPI transactions, which allow users to make small merchant payments via UPI without using a physical card.