India’s payments ecosystem continues its transformation, with data showing a consistent rise in digital transactions across nearly all categories, according to the Payment Systems Report, released on Thursday by the Reserve Bank of India for the half year ended June 2025.
The latest figures, capturing trends between December and June, highlight a strong growth in debit and credit card usages, PoS terminal transactions, and QR code-based payments. In contrast, paper-based instruments such as cheques have continued their steady decline, reflecting an accelerating shift towards a less-cash economy.
According to data, total payment transaction volumes rose sharply from 32.48 billion in 2019 to 208.49 billion in 2024, while the total value of payments increased from Rs 1,775 lakh crore to Rs 2,830.9 lakh crore during the same period. In the half-year ended June, 125.49 billion transactions were carried out, amounting to Rs 1,572 lakh crore — underscoring the growing reliance on digital modes of payment.
While most digital channels have registered a strong growth, some categories showed mixed results in the latest half-yearly numbers. Prepaid payment instrument (PPI) wallets and micro ATMs saw a decline in usage for the six months ended June 2025, compared with the preceding six months, possibly reflecting consumers’ preference for more seamless and integrated payment methods such as UPI and contactless cards.
The credit card segment has seen a steady rise, driven largely by private sector banks and digital co-branded offerings, while debit card transactions declined amid growing competition from UPI and other digital payment modes. This points to a clear divergence in usage patterns — credit cards are increasingly being used for online purchases and access to credit, while debit cards are mainly preferred for cash withdrawals and basic transactions.
The dominance of digital payments in the financial landscape is now near total. In 2019, digital transactions made up for 96.7% of total payments by volume and 95.5% by value. By 2024, these shares had climbed to 99.7% and 97.5%, respectively. The trend has only strengthened in 2025, with digital payments accounting for 99.8% of transaction volume and 97.7% of value in the first half of the year.
According to the report, India’s financial markets have also witnessed a steady growth across key segments such as government securities, forex clearing and rupee derivatives. The government securities market expanded significantly in terms of both value and volume. The forex clearing segment, too, continued its upward trajectory, supported by increasing cross-border trades and currency market activity. The rupee derivatives market also showed a consistent growth.
Further, geopolitical risks have emerged as a major factor shaping the future of cross-border payments, as global financial systems remain vulnerable to disruptions from sanctions, restrictions, and currency dependencies.
The Reserve Bank of India (RBI), in line with its Payments Vision 2025, has initiated a review of frictions impacting timely credit of inward cross-border remittances. “This assessment seeks to identify frictions within extant processes and recommend measures to streamline payment processing and enhance overall efficiency in the cross-border payments ecosystem,” the report said.
The RBI is also promoting international collaboration through the interlinking of the UPI with fast payment systems of other nations and enabling QR code-based payment acceptance abroad, further strengthening India’s role in the evolving global payments landscape.