UPI Records 35 percent Increase in First Half 2025 with Merchant Remitting Skyrocketing

The digital payments ecosystem in India experienced a massive growth during the initial six months of 2025, with its flagship system Unified Payments Interface (UPI) experiencing an annual growth of 35 per cent within the transaction volume. Based on the latest statistics, UPI was experiencing 106.36 billion transactions in the first half of 2025, which was one of its best growth periods.


Merchant Payments Making the lead.

The most acute increase was in the person to merchant (P2M) payments – the ones that are made in stores, over the internet and in local services. Such transactions increased about 37 percent annually, which was about 67 billions payments within the period. Comparatively, the P2P (P person to Person) transfers had a slightly slower increase of 31 %.

There was an increase in the worth of transactions as well: DUPI payments in H1 2025 have been valued at almost [?]143.34 lakh crore, demonstrating how well the system has become leveraged into the world of daily trade.


This turnaround is being triggered by a number of factors. One, the emergence of micro-merchants and neighbourhood stores as the most preferred payment option has experienced UPI volumes tremendous increase. The so-called kirana effect does exist, though, small local shops are slowly starting to accept payments via QR codes, and digital paying is no longer an exception.


Second, the QR codes as well as merchant-terminal points have multiplied considerably. By June 2025, over 678 million QR codes were on the network, and there were an increment of approximately 29 more point-of-sale terminals up to 11.2 million. This has increased infrastructure that is facilitating more transactions at lower values.


The drop in the size of the average ticket is the other trend: the average amount of UPI transaction dropped relative to approximately [?]1,478 in H1 2024 to approximately [?]1,348 in H1 2025. Although this can be considered a drop, according to most analysts, it is a reflection of strength (more people are using UPI in making daily purchases such as groceries, transport, utilities and digital services).


The accelerated adoption of UPI at the merchant level also seems to be having effects on debit card usage: with UPI defining the default method of paying in summer situations, the use of a traditional card in a point-of-sale is being repositioned to be used as a method to spend money of higher value or purchase specialised items.


To the consumers it brings an increased convenience and quicker payment, and to the merchants easier onboarding, almost free cost acceptance and increased accessibility. To the digital payment first time users, UPI is turning out to be a game changer due to its simplicity and omnipresence.

At the macro-level, such a robust growth also supports the fact that India is a leader in digital payments. When a national payment system touches above 100 billion transactions within six months with a growth rate of above a third, it is a sign that people (shop and transact) have changed the way of doing it.

Nevertheless, the tide is accompanied by new problems. With the growth of volume comes the increased expectations regarding reliability, speed, preventing fraud and security of the system. It will be important to ensure that infrastructure is up-to-date, and that smaller traders receive support by training and digital solutions, in order to maintain this growth.

Overall, the performance of UPI in the first half of the year 2025 when it makes a 35 percent increase in its volume and a 37 percent expansion in its merchant payments indicates that digital payments have become not only mainstream but also mainstream. The digital payments environment is still rapidly changing as merchants of all sizes have adopted UPI, and users use it to make transactions even when making some of the most basic daily purchases.