UPI has emerged as the most preferred mode of transaction, surpassing cash transactions, and there is a need for targeted interventions to strengthen RuPay debit card usage, particularly in rural and semi-urban areas, a report by Finance Ministry said on Monday.
According to the Finance Ministry report, UPI has emerged as the most preferred mode of transaction, accounting for 57%, surpassing cash transactions at 38%, primarily due to ease of use and instant fund transfer capability.
The report also highlighted that digital payments now dominate everyday transaction behaviour, with 65% of UPI users reporting multiple digital transactions per day.
Digital payment adoption rises across socio-economic segments
The report titled “Socio-Economic Impact Analysis of the Incentive Scheme for Promotion of RuPay Debit Card and low-value BHIM-UPI (Person-to-Merchant) transactions” was released by the Department of Financial Services (DFS), released a during the Chintan Shivir held on 13-14 February 2026.
The socio-economic impact analysis is based on an extensive primary survey covering 10,378 respondents across 15 States, including 6,167 users, 2,199 merchants, and 2,012 service providers, representing the key stakeholders of India’s digital payments ecosystem along with in-depth secondary research.
The evaluation indicates a significant and sustained increase in the adoption of digital payments across diverse socio-economic segments.
Need for targeted push on RuPay debit cards
The report also identifies the need for targeted interventions to strengthen RuPay debit card usage, particularly in rural and semi-urban areas.
Recommendations include focused merchant enablement programmes, promotion of low-value transactions through solutions such as UPI Lite, and continued investment in connectivity, digital literacy, and fraud risk mitigation, the finance ministry said In a Statement.
Government spent over Rs 8,200 crore on incentives
The report noted that the government provided incentives worth Rs 8,276 crore between FY22 and FY25 to support the expansion of RuPay debit cards and low-value UPI transactions.
The allocation included Rs 1,389 crore in FY22, Rs 2,210 crore in FY23, Rs 3,631 crore in FY24 and Rs 1,046 crore in FY25.