1. Growth of Digital
Payments in India
Trends, Drivers, and Innovations Shaping the Financial Landscape
Presented by Kunal Bansal - MBA Seminar

2. Presentation Roadmap
Navigating the rapid evolution of India’s digital payments sector.
History & Evolution
Brief timeline and foundational context.
Growth Drivers & Scale
Key factors and the overwhelming size of UPI.
Core Infrastructure
Understanding UPI and other vital payment rails.
Market Players
Dominant consumer and enterprise platforms.
Outlook & Challenges
Regulatory landscape and future growth potential.

3. Why Digital Payments Are Essential
Digital finance is a crucial catalyst for economic progress and modernisation in India.
Financial Inclusion
Provides access to formal financial systems for previously
unbanked and underserved populations.
Convenience & Speed
Offers instantaneous, 24/7 transaction processing,
significantly enhancing consumer experience.
Lower Transaction Costs
Dramatically reduces the logistical costs associated with
printing, transporting, and securing physical cash.
MSME & E-commerce Enabler
Digitisation empowers Micro, Small, and Medium Enterprises
(MSMEs) and fuels the growth of the digital economy.

4. The Digital Payments Journey: A Brief Timeline
From foundational infrastructure to a smartphone-driven revolution.
Early 2000s
Introduction of core banking systems like NEFT/RTGS,
establishing the initial foundation for digital inter-bank
transfers.
2010s: Mobile Era
Emergence of mobile wallets and IMPS (Immediate
Payment Service), shifting focus toward instant, mobile-
based transfers.
2016: Key Accelerant
Demonetisation accelerates the shift away from cash,
providing a critical boost for mass adoption of digital
channels.
2016 – Present
Launch and explosive growth of UPI, coupled with
widespread smartphone penetration, driving
unparalleled transaction volumes.

5. India's Core Digital Payment Rails
The National Payments Corporation of India (NPCI) operates a diverse and sophisticated suite of payment systems.
UPI (Unified Payments Interface)
The flagship system for instant, real-time, peer-to-peer
(P2P) and person-to-merchant (P2M) payments via
Virtual Payment Addresses (VPAs).
IMPS, NEFT/RTGS
Foundational inter-bank transfer systems, offering
instant (IMPS) or near-real-time (NEFT/RTGS) bulk
transfers, essential for banking operations.
AePS & Wallets
Aadhaar Enabled Payment System (AePS) facilitates
cash withdrawal/deposit using biometric
authentication. Mobile wallets offer pre-paid closed-
loop systems.
FASTag & Bharat BillPay
Dedicated services for automatic vehicle toll collection
(FASTag) and a centralised platform for easy utility bill
payments (BBPS).

6. UPI: A Quick Primer on
Interoperability
UPI is a real-time payment layer enabling instant fund transfers
between bank accounts on a mobile platform, simplifying
transactions.
Developed By
NPCI (National Payments
Corporation of India), an
organisation promoted by the
RBI and the Indian Banks’
Association.
Key Feature: Virtual
Payment Addresses
(VPA)
Users transact using a simple
VPA (e.g., name@bank) instead of
complex bank account numbers
and IFSC codes, enhancing
security and speed.

7. The Scale of UPI: Unprecedented
Growth
UPI has become the most successful real-time payment system globally,
processing billions of transactions monthly.
19.63B
Transactions
Processed
Total volume of
transactions recorded
in September 2025.
₹24.9T
Total Value
Transacted
The astronomical
value in lakh crore
rupees processed
through UPI in
September 2025.
~50%
Annual Growth
The platform
continues to
demonstrate robust
year-on-year growth
in both volume and
value.
Source: The Economic Times, based on NPCI data. The trajectory shows continued
exponential adoption, driven by merchant integration.

8. Market Dynamics: The Dominance of UPI Ecosystem
While UPI is the rail, a few major applications command the overwhelming majority of transaction volume.

9. Primary Drivers of Accelerated Digital Growth
The combination of technology access and active merchant integration has driven widespread adoption.
1. Smartphone & Data Accessibility
The 'Jio effect' led to drastically reduced data costs and the proliferation of
low-cost smartphones, connecting billions of users to the internet for the
first time.
2. Merchant Adoption & Digital Onboarding
Simplistic deployment methods like static and dynamic QR codes, coupled
with innovations like 'soundboxes,' ensure even small vendors can accept
digital payments easily.
3. Supportive Regulation
The government and RBI's focus on creating public digital infrastructure
(Digital Public Goods) like UPI has lowered entry barriers and fostered
trust.

10. Ecosystem Players: Consumer and Enterprise
The market thrives on a robust mix of consumer-facing apps and sophisticated enterprise payment processors.
Consumer Apps (UPI-Enabled)
• PhonePe, Google Pay (Market Leaders)
• Paytm, Amazon Pay, WhatsApp Pay
• Focus on P2P, P2M, and bill payments
Merchant/Enterprise Solutions
• Razorpay, PayU (Online Payment Gateways)
• Pine Labs, MSwipe (Physical PoS Solutions)
• Focus on aggregation, reconciliation, and payment processing for businesses.