UPI on fast track: Payments jump 34% as QR codes cross 709 million in India, says report
UPI processed a record 59.33 billion transactions during the quarter, up from 44.44 billion in Q3 2024. Transaction value climbed 21% to Rs 74.84 lakh crore.
- Dec 18, 2025,
- Updated Dec 18, 2025 12:36 PM IST
India’s digital payments story is no longer about adoption—it is about habit. In the July–September quarter of 2025, Unified Payments Interface (UPI) volumes surged 34% year-on-year, powered by the explosive spread of QR codes that now number 709 million across the country. From roadside tea stalls to neighbourhood pharmacies, scan-and-pay has firmly become the backbone of everyday commerce.
UPI processed a record 59.33 billion transactions during the quarter, up from 44.44 billion in Q3 2024. Transaction value climbed 21% to Rs 74.84 lakh crore, reflecting not just higher usage but deeper integration of digital payments into India’s economic activity. What stands out this quarter is the nature of that growth: UPI is increasingly being used to pay merchants rather than just friends and family.
Merchant payments (P2M) emerged as the biggest growth engine. P2M transaction volumes jumped 35% year-on-year to 37.46 billion transactions, outpacing the 29% growth seen in person-to-person (P2P) transfers, which rose to 21.65 billion transactions. This shift highlights UPI’s evolution from a peer-transfer tool into a retail-first payments platform, driven by frequent, low-value purchases such as transport fares, quick-service food, fuel and healthcare expenses.
At the heart of this transformation lies the rapid expansion of QR-based acceptance. Active UPI QR codes grew 21% year-on-year to 709 million, creating one of the densest digital acceptance networks globally. These QR touchpoints have effectively brought millions of small merchants into the formal payments ecosystem, putting kirana stores on equal footing with organised retail when it comes to accepting digital payments.
India’s payments infrastructure has expanded in parallel. Point-of-sale (PoS) terminals rose 35% year-on-year to 12.12 million units, strengthening in-store card and contactless payments. While BharatQR volumes edged down marginally, UPI QR growth has decisively tilted the market toward scan-based payments, particularly in semi-urban and rural areas where low-cost acceptance matters most.
The data also shows how UPI is embedding itself into daily life. As usage expands into micro-transactions—tea, vegetables and bus tickets—the average ticket size is shrinking for the right reasons. Overall, UPI average ticket size declined 9% year-on-year to Rs 1,262, while P2M average ticket size fell to Rs 291, underlining the platform’s dominance in routine retail spending.
Cards continue to complement this ecosystem rather than compete with it. Credit card issuance rose 8% year-on-year to 113.39 million, supporting high-value purchases and EMI-led consumption. Online card payments grew 29% during the quarter, with credit cards dominating larger-ticket spends, even as debit card usage declined in favour of UPI.
Taken together, Q3 2025 paints a clear picture of a scan-first economy in motion. UPI now drives the rhythm of India’s daily transactions, while cards anchor aspirational spending. With 709 million QR codes acting as digital doorways to commerce, India is no longer catching up to global payment trends—it is setting the pace.
India’s digital payments story is no longer about adoption—it is about habit. In the July–September quarter of 2025, Unified Payments Interface (UPI) volumes surged 34% year-on-year, powered by the explosive spread of QR codes that now number 709 million across the country. From roadside tea stalls to neighbourhood pharmacies, scan-and-pay has firmly become the backbone of everyday commerce.
UPI processed a record 59.33 billion transactions during the quarter, up from 44.44 billion in Q3 2024. Transaction value climbed 21% to Rs 74.84 lakh crore, reflecting not just higher usage but deeper integration of digital payments into India’s economic activity. What stands out this quarter is the nature of that growth: UPI is increasingly being used to pay merchants rather than just friends and family.
Merchant payments (P2M) emerged as the biggest growth engine. P2M transaction volumes jumped 35% year-on-year to 37.46 billion transactions, outpacing the 29% growth seen in person-to-person (P2P) transfers, which rose to 21.65 billion transactions. This shift highlights UPI’s evolution from a peer-transfer tool into a retail-first payments platform, driven by frequent, low-value purchases such as transport fares, quick-service food, fuel and healthcare expenses.
At the heart of this transformation lies the rapid expansion of QR-based acceptance. Active UPI QR codes grew 21% year-on-year to 709 million, creating one of the densest digital acceptance networks globally. These QR touchpoints have effectively brought millions of small merchants into the formal payments ecosystem, putting kirana stores on equal footing with organised retail when it comes to accepting digital payments.
India’s payments infrastructure has expanded in parallel. Point-of-sale (PoS) terminals rose 35% year-on-year to 12.12 million units, strengthening in-store card and contactless payments. While BharatQR volumes edged down marginally, UPI QR growth has decisively tilted the market toward scan-based payments, particularly in semi-urban and rural areas where low-cost acceptance matters most.
The data also shows how UPI is embedding itself into daily life. As usage expands into micro-transactions—tea, vegetables and bus tickets—the average ticket size is shrinking for the right reasons. Overall, UPI average ticket size declined 9% year-on-year to Rs 1,262, while P2M average ticket size fell to Rs 291, underlining the platform’s dominance in routine retail spending.
Cards continue to complement this ecosystem rather than compete with it. Credit card issuance rose 8% year-on-year to 113.39 million, supporting high-value purchases and EMI-led consumption. Online card payments grew 29% during the quarter, with credit cards dominating larger-ticket spends, even as debit card usage declined in favour of UPI.
Taken together, Q3 2025 paints a clear picture of a scan-first economy in motion. UPI now drives the rhythm of India’s daily transactions, while cards anchor aspirational spending. With 709 million QR codes acting as digital doorways to commerce, India is no longer catching up to global payment trends—it is setting the pace.