UPI sets new record, transaction growth reaches 30% in FY26, figure could reach 240 billion
UPI transactions could reach 240 billion in FY26. Growth is projected to be around 30 percent. Fintech companies are demanding the implementation of MDR due to the reduction in subsidies. Digital payments continue to expand rapidly.
India's digital payment system, UPI, continues to set new records. It is projected to reach 240 billion transactions in fiscal year 2026 (FY26), an increase of nearly 30 percent from last year.
Data from the National Payments Corporation of India (NPCI) confirms this rapid growth. However, amid this surge, payment companies are now demanding new revenue models from the government.
The use of UPI is increasing every year
UPI's growth curve is steadily rising. Transactions reached 131 billion in FY24, reaching 185 billion in FY25. It is now projected to reach 240 billion in FY26.
This represents an annual growth of approximately 30 percent. While this is slightly lower than last year's 41 percent growth, it still clearly demonstrates the increasing use of digital payments.
New records are being made in daily transactions
UPI has also reached new milestones in daily transactions. This fiscal year, an average of 657 million transactions occurred daily, significantly higher than last year's 506 million.
In March, the 800 million daily transaction mark was surpassed for the first time. The government and NPCI aim to reach 1 billion daily transactions, which, at current rates, appears achievable within the next fiscal year.
Why is the demand for MDR increasing?
Digital payment companies are now demanding the reinstatement of the Merchant Discount Rate (MDR). Previously, UPI charges were 0.3 percent, but this was removed in 2020.
Now, companies say that relying on subsidies is not a permanent solution.
They believe that implementing MDR on large merchants will provide them with a stable revenue stream, specifically for merchants with turnovers exceeding ₹40 lakh.
UPI