UPI drives digital economy, expands financial inclusion: Economic Survey 2026

Unified Payments Interface (UPI) has emerged as a key driver of the country’s digital economy, helping expand financial inclusion, support platform businesses and bring millions of users into the formal financial system, according to the Economic Survey 2025-26.

The Survey said that UPI handles around 15 billion transactions every month, backed by more than 80 crore smartphone users. The Survey links this scale directly to the rapid growth of platform-based services such as e-commerce, ride-hailing and freelancing, which together form the backbone of India’s expanding gig economy. 

The government said India’s financial system has undergone a rapid digital shift, driven by public digital infrastructure. According to the Survey, innovations such as the “Unified Payments Interface (UPI), Aadhaar-enabled services, and AI-driven credit scoring expanding access to financial services, particularly in rural and underserved areas.” 

The Survey noted that UPI has become a general-purpose payment instrument, with at least 60% using it across major transaction categories such as store purchases, peer-to-peer transfers, bill payments and online commerce. "Nearly 80% reported using UPI for three or more distinct use cases, with broadly similar patterns across gender and rural-urban locations," the Survey said.

However, the Survey also noted that over 90% of UPI users continue to use cash regularly, reflecting a hybrid payments ecosystem.

Beyond payments, UPI is now playing a growing role in credit access.

The Survey noted that “DPI payment interfaces, such as UPI, provide transaction data to assess creditworthiness,” helping banks and fintech companies lend to first-time borrowers who were earlier excluded from formal finance.

Citing academic research, the Survey said digital payment systems like UPI are helping bridge the gap between bank account ownership and access to formal credit by creating verifiable transaction histories and sharply reducing transaction costs. This has enabled lenders to expand credit across a wider risk spectrum, with fintech firms playing a key role in reaching new-to-credit customers.

The Survey said that "despite UPI’s remarkable reach, some access frictions remain, largely reflecting broader digital divides rather than resistance to the system itself."

"Looking ahead, the long-term sustainability of UPI will depend on aligning incentives across the ecosystem to support continued investment in infrastructure, reliability, and risk management, while preserving the openness and interoperability that underpin its success," the Survey said.