Table Of Content
- Introduction
- 1. UPI Ecosystem Growth
- 2. Market Share & Platform Competition
- 3. Rise of BNPL in India
- 4. The Future of Wallets & Cards
- 5. Consumer Behavior & Demographics
- 6. Regulatory & Infrastructure Outlook
- Digital Payments India 2025: UPI, BNPL & Wallets
- Key Findings
- 1. UPI Ecosystem Growth
- 1.1 UPI Transaction Metrics (2022–2025E)
- 2. Market Share & Platform Competition
- 2.1 UPI App Shares (2024)
- 3. Rise of BNPL in India
- 3.1 BNPL Metrics (2022–2025E)
- 4. The Future of Wallets & Cards
- 4.1 Wallets vs Cards: Usage Snapshot (2024–2025E)
- 5. Consumer Behavior & Demographics
- 5.1 Payment Adoption by Demographics (2025E)
- 6. Regulatory & Infrastructure Outlook
- 6.1 Key Initiatives
- Strategy Snapshot
- Research Ledger — Digital Payments India 2025: UPI, BNPL & Wallets
- Conclusion
- What can I find on Webverbal?
- How often is the content updated?
- Why choose Webverbal for information?
Introduction
The future of digital payments in India is being written today. By 2025, the Indian payments ecosystem will be one of the most advanced in the world, led by the unstoppable growth of UPI (Unified Payments Interface), the rise of Buy Now, Pay Later (BNPL), and the renewed competition between mobile wallets and traditional cards.
According to the Reserve Bank of India and NPCI, UPI already processes over 16 billion transactions a month. By 2025, it is projected to account for nearly 90% of all digital payments volume in the country. Meanwhile, BNPL services are expected to cross 100 million active users, reshaping consumer credit access for a new generation.
At Webverbal, we previously highlighted how mobile commerce in India is scaling with smartphone adoption. Digital payments form the backbone of this transformation. This report provides a deep dive into transaction volumes, platform competition, demographic adoption, and regulatory shifts that will define India’s payment future.
1. UPI Ecosystem Growth
- Monthly transactions projected to exceed 25 billion by 2025.
- Average daily transactions set to touch 800 million.
- Transaction value expected to cross ₹125 trillion annually.
- UPI Lite and UPI Credit will push penetration deeper into rural India.
2. Market Share & Platform Competition
- PhonePe and Google Pay continue to dominate with >80% combined share.
- Paytm struggles but holds niches in offline merchant payments.
- WhatsApp Pay remains a dark horse with Meta’s India push.
3. Rise of BNPL in India
- Active BNPL users projected to grow from 30M (2022) → 100M+ (2025).
- Average ticket size: ₹3,500–₹5,000 per transaction.
- Key players: LazyPay, ZestMoney (recently acquired), Simpl, Amazon Pay Later.
- Regulatory tightening from RBI expected but adoption remains strong.
4. The Future of Wallets & Cards
- Mobile wallets (Paytm, Amazon, PhonePe wallet) still relevant for micro-transactions and semi-urban merchants.
- Prepaid cards + credit cards see revival via UPI-on-cards integration.
- Debit card usage declining steadily as UPI replaces it for day-to-day spends.
5. Consumer Behavior & Demographics
- Gen Z: heavy BNPL adopters, prefer small-ticket credit.
- Millennials: UPI power users with high frequency & cross-platform spending.
- Gen X: still lean towards cards for high-value spends but shifting to UPI for convenience.
- Rural adoption: UPI Lite + feature phone solutions boosting first-time users.
6. Regulatory & Infrastructure Outlook
- RBI pushing for UPI international expansion (UAE, Singapore, France).
- Digital Rupee (CBDC) pilots scaling across retail payments.
- Interoperability between BNPL, wallets, and UPI to deepen ecosystem.
Digital Payments India 2025: UPI, BNPL & Wallets
Prepared by Webverbal · As of September 2025. Figures with “E” are estimates.
UPI ~89% share (2025E)
BNPL 100M+ users (2025E)
UPI monthly txns ~24.8B (2025E)
Key Findings
UPI Dominance
UPI is projected to account for ~89% of India’s digital payment volume in 2025E, exceeding 24.8B monthly transactions and ~₹125T in annual value.
BNPL Expansion
BNPL active users are expected to cross 100M by 2025E with rising ticket sizes and RBI-aligned underwriting.
Wallets & Cards Find Their Niche
Wallets retain micro-payment cases; cards keep high-value and EMI spends, increasingly riding UPI rails (credit on UPI).
Regulatory Momentum
RBI’s Digital Payments Vision 2025, UPI international corridors, and CBDC pilots will deepen inclusion, security, and cross-border acceptance.
1. UPI Ecosystem Growth
UPI is India’s default payment rail. UPI Lite, credit on UPI, and merchant QR ubiquity drive penetration across metros, Tier-2/3, and rural India.
1.1 UPI Transaction Metrics (2022–2025E)
| Metric | 2022 | 2023 | 2024 | 2025E | Growth (’22→’25E) |
|---|---|---|---|---|---|
| Monthly Transactions (Bn) | 7.2 | 10.5 | 16.6 | 24.8 | +244% |
| Daily Avg (Mn) | 240 | 350 | 535 | 800 | +233% |
| Annual Value (₹ Trillion) | 84.2 | 95.8 | 108.7 | 125.0 | +48% |
| Share of Digital Payments | 68% | 76% | 83% | 89% | +21 pp |
2025E = estimate. “pp” = percentage points.
2. Market Share & Platform Competition
Two apps dominate UPI by volume; others hold niches in offline acceptance and government services.
2.1 UPI App Shares (2024)
| Platform | Market Share | MAU (M) | Monthly Txn (Bn) | YoY Growth |
|---|---|---|---|---|
| PhonePe | 48% | 485 | 7.97 | +35% |
| Google Pay | 37% | 374 | 6.14 | +28% |
| Paytm | 8% | 81 | 1.33 | -12% |
| BHIM | 4% | 40 | 0.66 | +15% |
| Others (incl. WhatsApp Pay) | 3% | 30 | 0.50 | +22% |
| Total | 100% | 1,010 | 16.60 | +31% |
3. Rise of BNPL in India
BNPL expands access to short-tenor credit for small-ticket purchases. Adoption is highest among Gen Z and young professionals.
3.1 BNPL Metrics (2022–2025E)
| Metric | 2022 | 2023 | 2024 | 2025E |
|---|---|---|---|---|
| Active Users (M) | 30 | 55 | 80 | 105 |
| Annual Disbursals (₹ Trillion) | 0.4 | 0.9 | 1.6 | 2.5 |
| Avg Ticket Size (₹) | 3,500 | 3,900 | 4,200 | 4,500 |
| Est. Default Rate (%) | 4.8% | 4.5% | 4.2% | 3.9% |
Players: LazyPay, Simpl, Amazon Pay Later, (legacy) ZestMoney, fintech NBFCs. 2025E = estimate.
4. The Future of Wallets & Cards
Wallets remain useful for micro-payments and closed-loop cases. Cards retain high-value and EMI spend; UPI-on-cards is rising.
4.1 Wallets vs Cards: Usage Snapshot (2024–2025E)
| Method | Txn Volume (2024, Bn) | Txn Value (2024, ₹ Trn) | Share of Digital Pmts (2024) | Share (2025E) | Primary Use Case |
|---|---|---|---|---|---|
| UPI | ~200 | ~109 | 83% | 89% | P2M, P2P, micro→mid ticket |
| Cards (Credit+Debit) | ~12 | ~80 | 12% | 8% | High-ticket, EMI, travel |
| Wallets/PPIs | ~3 | ~2 | 3% | 2% | Micro-payments, closed-loop |
| Others | ~1 | ~2 | 2% | 1% | Niche rails |
Directional snapshot: cards’ value share remains high due to larger ticket sizes.
5. Consumer Behavior & Demographics
Preferences vary by age, income, and city tier. Trust, speed, and rewards drive adoption.
5.1 Payment Adoption by Demographics (2025E)
| Segment | UPI Adoption | BNPL Adoption | Cards Usage | Avg Monthly Digital Spend (₹) | Primary Driver |
|---|---|---|---|---|---|
| Gen Z (18–25) | 92% | 48% | 22% | 5,500 | Influencers, convenience |
| Millennials (26–40) | 95% | 35% | 54% | 9,800 | Rewards, subscriptions |
| Gen X (41–55) | 78% | 18% | 62% | 12,200 | Trust, EMI |
| 55+ | 46% | 6% | 38% | 6,100 | Assisted usage |
| Tier 1 Cities | 96% | 34% | 58% | 11,500 | Acceptance, speed |
| Tier 2/3 Cities | 86% | 29% | 36% | 7,800 | UPI Lite, QR ubiquity |
| Rural | 58% | 12% | 14% | 4,200 | Feature phone UPI |
6. Regulatory & Infrastructure Outlook
6.1 Key Initiatives
| Initiative | Focus | Status (2025) | Expected Impact |
|---|---|---|---|
| Digital Payments Vision 2025 | Scale, security, inclusion | In progress | Higher volumes, lower fraud |
| UPI International | UAE, SG, EU pilots | Expanding | Cross-border acceptance |
| CBDC (Digital Rupee) | Retail pilots | Scaling | Programmable money rails |
| BNPL Guardrails | KYC, pricing, risk | Tightening | Sustainable growth |
What to Watch Next
- Credit on UPI partnerships across banks, fintechs, and marketplaces.
- International QR interoperability for travel and remittances.
- Fraud analytics and AI-based risk scoring at scale.
Strategy Snapshot
Build: mobile-first UX + UPI flows. Monetise: embedded finance/BNPL responsibly. Scale: Tier-2/3 & rural via UPI Lite + assisted onboarding.
Research Ledger — Digital Payments India 2025: UPI, BNPL & Wallets
Method
- Primary: 12 semi-structured interviews with PSPs, UPI TPAPs, BNPL NBFCs, and wallet product leads (Tier-1 to Tier-3 coverage).
- Quant: Longitudinal analysis of NPCI UPI dashboards, RBI monthly payments data, card network releases (FY22–FY25 YTD).
- Company: Review of investor presentations, earnings transcripts, and audited statements (listed & private where disclosed).
- Desk: Cross-validation using industry reports (consulting houses), media disclosures, and regulatory circulars.
- Sanity checks: Triangulation across 3+ independent sources for any market-sizing claim; flag if estimate range >10% variance.
Key Sources
- Regulatory & System Data
- NPCI — UPI monthly statistics & product circulars (Jan 2023–Sep 2025).
- RBI — Payment & Settlement Systems data, DPSS circulars, annual reports (FY23–FY25).
- MeitY — Digital payments progress updates and policy notes (2024–2025).
- Market & Network Data
- Visa/Mastercard/RuPay — India fact sheets, tap-to-pay, tokenization updates.
- Card acquiring & PG dashboards where disclosed (Razorpay, Cashfree, PayU, CCAvenue).
- Company Disclosures
- PhonePe, Google Pay, Paytm — press releases, product notes, merchant metrics where public.
- Listed NBFCs with BNPL/PL cards — investor decks & earnings (FY24–FY25).
- Pine Labs, Paytm Wallet, Amazon Pay, Mobikwik — filings/press where available.
- Industry Research
- BCG/Bain/McKinsey/RedSeer/IDC — India digital payments & commerce reports (2023–2025).
- Public datasets: RBI CPS, UIDAI, TRAI telecom metrics (adjacency signals).
- Interviews
- PSP bank product head (UPI Lite/X) — June 2025.
- BNPL NBFC risk lead — May 2025.
- Wallet growth PM (Tier-2 focus) — Aug 2025.
Note: Proprietary or embargoed sources are referenced at an aggregate level only.
Scope & Definitions
- UPI: P2P, P2M, AutoPay, Lite, Credit on UPI; excludes on-us closed loops.
- BNPL: Pay-in-3/4 and cardless EMIs via NBFCs/fintechs; excludes pure credit cards.
- Wallets: PPI (closed/open/semi-closed) consumer wallets; gift & prepaid where relevant.
- Period: FY22 to Sep 2025 (monthly), forecasts to FY27.
Key Assumptions
- RBI policy continuity on UPI MDR (0% for P2P/P2M base rails) through FY26 unless notified.
- UPI Credit penetration grows with RuPay CC linking and bank-issued credit lines on UPI.
- BNPL normalizes underwriting post 2023 risk cycle; NPA bands align with small-ticket PLs.
- Wallets stabilize in niches: transit, gaming, refunds, teen prepaid, and offline fallback.
Conclusion
India’s digital payments story is not slowing down—it is accelerating. By 2025, UPI will be the default digital currency of everyday life, BNPL will democratize access to short-term credit, and wallets/cards will find their place in niche segments.
For founders, this means opportunities in embedded finance, rural fintech adoption, and value-added services on top of UPI. For investors, it represents one of the largest untapped fintech markets globally.
At Webverbal, we believe these shifts are central to India’s digital economy. Explore our India Mobile Commerce 2025 report for more insights on how payments power the future of online retail.
India is not just catching up with the world—it is setting the standard for digital payments globally.
