By- Dr Mrutyunjaya Sahoo, Assistant Professor, Paari School of Business,
SRM University – AP, (Amaravati)
Over the past decade, India has witnessed a significant transformation in its payment ecosystem, moving steadily from a cash-intensive economy to a predominantly cashless one. Indian households and firms are now increasingly familiar with digital modes of payment, replacing the traditional reliance on physical currency. Predominantlycashless instruments include the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), National Electronic Funds Transfer (NEFT), and Real Time Gross Settlement (RTGS). In 2024-25, total digital payment transactions crossed to 2,330.72 lakh crores, underscoring the growing trust and scale of digital payments in India.
Among these, UPI has emerged as the most dominant and widely used platform.The adoption of UPI accelerated sharply in the post–COVID-19 period, when contactless and efficient payment mechanisms became essential. Applications such as PhonePe, Google Pay, Paytm,Amazon Pay, and BHIM have played a crucial role in popularizing digital transactions across income groups and geographical regions in India.
The Reserve Bank of India (RBI), in collaboration with the National Payments Corporation of India (NPCI), has been instrumental in developing and regulating this digital infrastructure. Households and firms have increasingly adopted the UPI system, reflecting its advantages in terms of transaction speed, system integration, low costs, and ease of use. India’s UPI has rapidly gained international acceptance across Europe, the Middle East, South Asia, and Southeast Asia. Countries such as France, the UAE, Bhutan, Singapore, Nepal, and Sri Lanka have integrated UPI to facilitate seamless manufacturing, retail, tourism, and cross-border digital payments. The global adoption of UPI reflects India’s growing leadership in digital payment innovation. By enabling interoperable, low-cost, and real-time transactions, UPI supports international tourism, remittances, and diaspora payments, while ongoing discussions signal further expansion into key global financial hubs.
Beyond convenience, cashless transactions reduce currency management costs, lower environmental negative impact, and enhance transparency, thereby helping to minimise fraud and unaccounted transactions.Overall, the transition from physical cash to digital payments reflects India’s technological progress and the RBI’s pivotal role in shaping a modern, efficient, and inclusive financial system.
