The Unified Payments Interface (UPI) in India processed 25.47 billion transactions worth over Rs 31.5 lakh crore in October 2026. While merchant payments constituted the majority of transactions by volume, person-to-person transfers accounted for the largest share of the transaction value.
- UPI transactions grew 23% in volume year-over-year.
- Merchant payments composed 63.2% of total UPI transactions.
- Person-to-person transfers led total transaction value.
What happened
India’s UPI system processed 25.47 billion transactions in October 2026, marking a 5.8% increase from the previous month and a 23% rise compared to October 2025. The total value of transactions reached Rs 31.53 lakh crore, up 7.3% month-over-month and 15.6% year-over-year. The scheme averaged over 821 million daily transactions in October.
Data from the National Payments Corporation of India (NPCI) reveals that merchant payments (P2M) made up 63.2% of the total transaction volume. However, person-to-person (P2P) transfers accounted for most of the overall transaction value, indicating that these transfers tend to involve larger sums relative to merchant payments.
Why it matters
The divergence between transaction volume and value highlights evolving consumer behavior in India's digital payments landscape. Frequent small-value payments dominate merchant interactions, while personal transfers, although fewer, involve larger sums of money. This nuance is crucial for payment providers and merchants strategizing user engagement and service development.
The steady growth in UPI adoption, including an increase in banks connected—rising from 756 to 758 in October—reinforces UPI’s position as the backbone of India’s payment infrastructure. Understanding these dynamics helps financial institutions optimize offerings tailored to different payment segments.
What to watch next
Monitoring the balance between P2M and P2P transactions will be key to anticipating shifts in consumer payment preferences and potential areas of growth within the UPI ecosystem. The slight rise in average transaction value suggests ongoing enhancements in transaction size and trust in digital payments.
Expansion in bank participation and any regulatory changes affecting transaction caps or user experience could further influence UPI usage patterns. Stakeholders should also watch for technological innovations that might blur the lines between personal and merchant payments or introduce new categories within digital payments.