Unified Payments Interface (UPI), India’s flagship digital payments platform, has rebounded sharply in May 2025, registering a 4.4% month-on-month (MoM) increase in transaction volumes after a rare decline in April. The platform processed a record 18.68 billion transactions in May, up from 17.89 billion the previous month, according to the latest data released by the National Payments Corporation of India (NPCI)
April 2025 saw UPI transaction volumes slip from their March peak of 18.3 billion, largely due to multiple service disruptions, including a major API outage on April 12 that affected several leading banks and payment apps. Despite some lingering network issues in May, including a brief outage at PhonePe, the overall system proved resilient, quickly regaining momentum and surpassing previous records.
UPI’s rapid resurgence is attributed to several factors:
Widespread Adoption: Continued smartphone penetration and the popularity of apps like PhonePe, Google Pay, and Paytm, which together account for over 80% of UPI volumes.
Government Push: Ongoing digitization efforts, including incentives for merchants and consumers, have made UPI the preferred payment method post-demonetisation.
Consumer Trust: Quick resolution of technical issues and robust system upgrades have restored user confidence after April’s disruptions.
UPI now represents 84% of India’s total retail payment transactions, with the Reserve Bank of India (RBI) aiming to expand its reach to 20 countries by 2029. The platform’s growth is supported by investments in payment infrastructure and the proliferation of QR codes and point-of-sale terminals, especially in smaller towns and rural areas.
While UPI’s breakneck growth is showing signs of approaching saturation in urban centers, new opportunities are emerging in cross-border payments, rural adoption, and integration with global financial systems. However, maintaining system stability and addressing capacity constraints will be crucial as transaction volumes continue to climb.
