UPI accounts for over 83% of India’s digital payments in FY25: Tracxn data

Tracxn data, commissioned by TWID, leading rewards-based payment network, highlights a structural shift in India’s alternative payments ecosystem. Here are some of the key findings of the data.

With UPI now mainstream, accounting for over 83% of India’s digital payment volumes in FY25 and processing 185.8 billion transactions, a 41.7% year-on-year increase, transaction scale is no longer the primary constraint, as per the analysis.

Tracxn’s analysis highlights a growing use of credit-on-UPI and pay-later offerings are increasingly being used for groceries, utilities, and everyday services, subtly changing how consumers think about monthly spending and short-term liquidity.

Newer models are changing this dynamic by enabling rewards to function as payment value at checkout, improving utilisation while aligning incentives across consumers, issuers, and merchants, as per data.

Amit Koshal, fFounder & CEO, TWID says “When rewards become instantly usable, they start behaving like real purchasing power. The opportunity—and responsibility—for the ecosystem is to ensure this liquidity helps households manage expenses better, without encouraging invisible overspending.”

Between 2020 and 2025 YTD, more than 420 alternative payments startups have emerged, spanning rewards-based payments, credit-on-UPI, BNPL, digital wallets, QR-led solutions and stored-value systems.

Tracxn’s data suggest that India’s alternative payments ecosystem is entering a new phase—one where the real impact is not just on transactions, but on how everyday financial decisions are made inside Indian households..