India now makes fastest payments globally, driven by UPI: IMF note

Business Standard

10-07-2025

India has emerged as the global leader in fast payments, driven by the widespread adoption of the Unified Payments Interface (UPI), according to a recent note published by the International Monetary Fund (IMF).
The note, titled Growing Retail Digital Payments: The Value of Interoperability, authored by IMF staff members Alexander Copestake, Divya Kirti and Maria Soledad Martinez Peria, highlights a decline in the use of debit and credit cards and a shift away from cash since UPI was introduced in 2016.
'India now makes faster payments than any other country. At the same time, proxies for cash usage have fallen,' the report stated, as quoted by PTI.
The IMF note uses nationwide data to examine the impact of interoperable payment systems like UPI on digital transaction growth. These systems allow users of different payment service providers to transact seamlessly.
'Since its launch in 2016, UPI has grown quickly, while some proxies for cash usage have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India,' the authors wrote.
Because cash transactions often occur in informal sectors and remain unrecorded, the IMF uses ATM withdrawal data at the district level as a proxy to measure cash usage.
'Total digital payments relative to cash withdrawals rise substantially and persistently more after integration in districts that face greater increases in de facto interoperability. This evidence suggests that interoperability can indeed support adoption of digital payments and encourage a transition away from cash,' the note added.
Recommendations from IMF
The authors recommend that as more service providers join systems like UPI, policymakers must closely monitor the rise of dominant players to preserve market competition.
'Payment authorities should use a range of metrics to identify potential threats to this goal and tailor any responses to the specific underlying anti-competitive mechanism,' the report said.
It also suggests that system operators maintain regular dialogue with both existing and new private sector participants to ensure the ecosystem remains inclusive and competitive.
June UPI data
In June, UPI transactions declined marginally by 1.5 per cent to 18.4 billion, down from 18.68 billion in May, according to NPCI data. The overall transaction value fell by 4 per cent to ₹24.04 trillion, compared to ₹25.14 trillion the previous month.
However, on a year-on-year basis, transaction volume rose 32 per cent and value increased 20 per cent. Daily transaction volumes grew from 602 million in May to 613 million in June, even as the average daily transaction value fell slightly to ₹80,131 crore from ₹81,106 crore.