India’s Digital Transactions Set TO 3X By 2028-29

Digital financial transactions in India are expected to triple from 159 billion in 2023–2024 to 481 billion by 2028–2029, according to a PwC India report. The Native Payments Handbook 2024-29. The value of these digital payments is also set to double, growing from $3.16 trillion (Rs. 265 trillion) to $7.06 trillion (Rs. 593 trillion) during the same period. This impressive growth is being driven by several factors, including technological innovations, stronger government regulations, and the introduction of advanced technologies aimed at improving user experience and managing risks.

A major player in this growth is the Unified Payments Interface (UPI), which is projected to experience a 57% increase in transaction volumes. The number of UPI transactions is expected to rise from 131 billion to 439 billion by the fiscal year 2028-29, accounting for over 91% of all retail digital payments in India by that time.

Credit cards have also seen substantial growth, with more than 16 million new cards issued in 2023-24, bringing the total number of credit cards in use to over 100 million. Due to the rise in credit card usage, transaction volumes and values have increased by 22% and 28%, respectively. On the other hand, debit card usage has declined, with the number of transactions falling from 3.94 billion in FY22 to 2.29 billion in FY24, and transaction values dropping from $86.97 billion (Rs. 7.3 trillion) to $70.29 billion (Rs. 5.9 trillion).

The expansion of QR code infrastructure has been another significant factor in the growth of digital payments, with nearly 30% year-over-year growth in 2023-24 across various city tiers. Innovations such as soundboxes and the Payments Infrastructure Development Fund (PIDF), introduced by the Reserve Bank of India (RBI), have further accelerated this growth. The PIDF was specifically designed to encourage the deployment of Point of Sale (PoS) infrastructure in smaller cities and towns across the country, particularly in Tier-III to Tier-VI centres.

The last decade, India’s digital payment ecosystem has witnessed remarkable growth, positioning the country as a global leader in this space. This evolution has been pivotal in transitioning from a cash-dominated economy to one that increasingly relies on digital transactions, with significant adoption across metropolitan areas, tier 1 to tier 4 cities, and even rural regions. At the forefront of this revolution is UPI, which has driven deeper penetration of digital payments in India. Innovative use cases, including credit card linkages and international partnerships, are further propelling this momentum. Notably, there is a discernible shift towards person-to-merchant (P2M) transactions, enhancing the network effect as more customers engage with merchant.

In the last ten years, India’s digital payment system has grown rapidly, making the country a global leader in this area. This growth has helped move India from relying heavily on cash to using more digital transactions, with people in big cities, smaller towns, and even rural areas adopting digital payments .A key player in this change is the Unified Payments Interface (UPI), which has greatly increased the use of digital payments across India. New features like linking credit cards to UPI and partnerships with international companies are pushing this growth even further. More people are now using digital payments when shopping, both online and in stores, which is encouraging more merchants to accept digital payments.

Innovations like soundboxes and better selling strategies are helping more merchants use digital payments. Due to this, it is anticipated that UPI will increase from around 350 million transactions per day in 2024 to 1 billion transactions per day by the fiscal year 2028.
The number of credit cards in use now exceeds 100 million, and this number is increasing.

This number is expected to double to 200 million by 2029, with daily transactions increasing to 25 million, which is 2.5 times the current volume. Additionally, the Bharat Bill Payment System (BBPS) is becoming more popular, thanks to government support and the addition of new billers, making it easier to handle cross-border transactions and helping the system grow.

This year has seen the implementation and growth of several new payment technologies and use cases, including UPI Lite, credit cards on UPI, virtual credit cards, pay-by-points, business payments, and merchant acquisition. These advancements are part of a broader strategy to enhance the issuance and distribution of payment solutions while also promoting digital payments among merchants through innovative activation strategies and cross-sells.

The image added is for representation purposes only