UPI Payments Surge in Q3 of 2025, Credit-on-UPI Seen Driving Next Phase of UPI Growth

New Delhi, Dec 18 (KNN) Unified Payments Interface or UPI continued to power India's digital payment system with total transaction volume rising 33.5% year-on-year to 59.33 billion in July-September period (Q3) of 2025.

During this period, the total transaction value climbed 21% year-on-year to Rs 74.84 trillion, as per a report released by Worldline India on Thursday.

The report highlighted the continued dominance of UPI, the sharp acceleration of QR-led merchant acceptance, sustained growth in card issuance, and deepening digital adoption across the country.

During Q3 of 2025, Person-to-Merchant (P2M) transactions continued to outpace Person-to-Person (P2P), reflecting UPI’s dominance in everyday retail payments.

The report noted that average ticket transaction size declined to Rs 1,262 (from Rs 1,363) in the period under review, highlighting increased usage for micro-transactions such as mobility, food, healthcare essentials, and hyperlocal commerce.

The Worldline report said that India reached 709 million active UPI QRs in Q3 of 2025, marking a 21% increase since July 2024.

"Dense QR acceptance across kiranas, pharmacies, transport hubs, and rural markets has made scan-and-pay the default payment mode nationwide," it stated.

Cards Preferred for High-value Payments

Credit, debit and other payment cards retained their high-value role in online payments during the third quarter of the calendar year.

As per the report, credit card transactions grew 26% to 1.45 billion in Q3 this year, with transaction value at Rs 4.08 trillion. Debit card transactions however declined 25%, reflecting migration of low-ticket spends to UPI. Prepaid card transaction volumes grew 23% year-on-year.

Payments Outlook for Q4 2025 and Early 2026

In its outlook for Q4 2025 and early 2026, the report pointed to accelerated innovation and deeper ecosystem integration.

"Interoperable QR is expected to move from pilot phases to everyday usage across mobility, healthcare, fuel stations, and public utilities—delivering a unified scan-and-pay experience," it said.

The Worldline report said Credit-on-UPI is likely to witness mass adoption going forward, enabling small-ticket credit, EMIs, and pre-approved credit lines through familiar UPI journeys.

(KNN Bureau)