Since September 2024, when UPI crossed 500 million transactions per day, there has been a steady slowdown in its transaction growth, both in terms of value and volume. The Total Payment Volume (TPV) growth in the first half of 2025 was just 40 per cent of the TPV growth in the second half of 2024. 

As of Q1 FY26, growth in UPI transactions by value at 23% y-o-y is just marginally above that for credit cards (21%). Some of this shift reflects the launch of multiple co-branded credit cards by banks last year, which are taking away relatively larger ticket payments done through UPI via mobile. We note that the share of RuPay credit cards, which use UPI rails (& which we discuss later), is still very small in comparison.

Conversations we had with company executives indicate that there is an increasing reluctance by shareholders of NPCI (mainly banks) to invest in additional capex to handle higher loads on the network. That has manifested itself in rising rates of tech failures on the network. I estimate that volume-weighted technical failures/delays are at three-year highs since March 2025. All of this is indicative of high-volume throughput impacting performance.

Apart from the NPCI data, I also use another proxy to measure what share of notes and coins in circulation are likely being used for transaction purposes. This estimate shows that substitution of cash transactions with digital transactions has stagnated, especially post COVID (after FY20). Between 38-43% of notes and coins in circulation are being used for transactions. That value hasn’t changed much. 

UPI’s Peers have scaled quickly since COVID

The illustration below shows UPI’s peers —especially Brazil’s PIX and Malaysia’s DuitNow—have quickly scaled since COVID.