India’s digital payment ecosystem reached dazzling new heights this Diwali, as the Unified Payments Interface (UPI) recorded its highest-ever single-day transaction value and volume. According to data from the National Payments Corporation of India (NPCI), UPI transactions on Diwali eve (October 18) surged to 754 million, amounting to a record Rs 1.02 lakh crore, underscoring how festive fervour and lower GST rates have powered India’s cashless economy.
In October, UPI averaged Rs 94,000 crore in daily transactions, up 13% from Rs 82,991 crore in September. The month saw an average of 695 million daily transactions, up from 654 million the previous month. Overall, UPI clocked an astounding Rs 23.5 lakh crore across 16.58 billion transactions, reflecting the deepening penetration of digital payments across urban and rural India alike.
Festive cheer
The Diwali season has historically been a key period for consumer spending, and this year’s data reveals that Indians are increasingly choosing digital routes over cash. The combination of festive offers, GST reductions on select goods, and seamless payment experiences through apps like PhonePe, Google Pay, and Paytm spurred spending across e-commerce and offline retail.
Industry experts say the festive rush has reaffirmed UPI’s role as India’s dominant digital payment system—now accounting for nearly 85% of all digital transactions. Compared to last year’s October average of ₹78,327 crore per day, this year’s festive figures indicate both higher consumption and a growing comfort with instant digital payments.
Credit-based spending
Interestingly, Diwali also reflected a broader shift in consumer behavior—from saving to spending. Credit card transactions recorded strong growth, particularly online. Credit card e-commerce volumes jumped 22% year-on-year, even as debit card e-commerce usage dropped 24%, signaling a clear tilt toward credit-fueled consumption.
For the second straight year, online credit-card purchases (4.8 million) outpaced point-of-sale (PoS) swipes (4.2 million), underscoring the dominance of e-commerce platforms during the festive period. Offline spending, however, also showed resilience—PoS transactions grew 15.6%, the sharpest rise in three years after contracting last year.
Meanwhile, debit card payments continued their decline, with both PoS and e-commerce usage falling. Prepaid instruments such as wallets and gift cards saw the steepest contraction—down 26% in volumes and over 50% in value, as UPI’s convenience continued to eclipse older digital payment modes.
While PhonePe and Google Pay remain the undisputed leaders, smaller UPI players are rapidly scaling up. According to the Economic Times, Sachin Bansal’s Navi processed around 500 million transactions in August, while Flipkart-backed Super. Money handled 250 million and NPCI’s own BHIM app saw about 100 million.
This competitive expansion has slightly diluted the dominance of the top two players — Google Pay and PhonePe’s cumulative market share slipped to 80% in August, from 85% a year earlier. The growing participation of fintech startups has strengthened the ecosystem’s diversity and resilience, reducing concentration risks and encouraging innovation.
UPI Help
To enhance user experience amid rising transaction volumes, NPCI has launched ‘UPI Help’, an AI-powered virtual assistant designed to assist users with payment-related queries, grievance redressal, and mandate management.
The tool will allow users to check transaction status, track complaints, and view active UPI AutoPay mandates in one unified interface. Integrated with the UDIR (UPI Dispute Resolution) framework, it aims to streamline dispute handling—especially for incomplete or pending transactions.
Initially, UPI Help will be accessible via member bank websites, chatbots, and the DigiSaathi platform. NPCI plans to gradually expand it to major UPI apps through API integrations, based on pilot results.
With record-breaking transaction values and the rollout of new user-friendly tools, this Diwali marks another milestone in India’s digital transformation. As UPI cements its place at the heart of the economy, the data highlights a profound behavioral shift—from cash to clicks, from savings to smart spending—making 2025 not just a golden year for festivals, but for fintech innovation as well.
