Data shows India's UPI recorded 10B+ merchant transactions in October 2024, up 53% YoY, while credit cards saw a 35% YoY increase in transactions to 433M
Pratik Bhakta / The Economic Times :
Context & Ripple Effects
UPI had already crossed 1 billion transactions and 100 million users in 2019, then reached close to 300 million individuals and 50 million merchants by 2023 in its early mass-market expansion. October's figures show that merchant checkout activity had become a major part of that scale.
The comparison with credit cards matters because both rails are growing. It also arrives after July data showed PhonePe and Google Pay handling more than 85% of UPI transactions, making transaction growth especially consequential for the dominant payment apps.
First-order effects
- UPI's more than 10 billion merchant transactions signal sharply higher payment-processing demand across participating merchants, banks and UPI apps.
- Credit-card transactions also rose to 433 million, indicating that card use continued to expand alongside UPI rather than being displaced outright in this period.
Second-order effects
- Merchants and payment providers have a stronger incentive to support both UPI and cards reliably, since growth is occurring on each rail and customer payment preferences remain mixed.
- Higher UPI volumes increase the commercial and operational importance of the leading apps, whose July transaction share was already heavily concentrated in PhonePe and Google Pay.
Third-order effects
- If this pattern persists, India's retail payments market will be defined less by a single winning instrument than by UPI becoming a core high-frequency merchant rail alongside a still-growing card market.
- The scale of UPI strengthens the strategic value of domestic payment infrastructure, consistent with the later push to use RuPay's UPI linkage to challenge global card networks.
The trend: India's payments market is moving toward ubiquitous real-time merchant payments while cards continue to grow for use cases where they retain demand.