India’s digital payments network reached a new milestone in October, with Unified Payments Interface (UPI) transactions crossing 25 billion for the first time. The sharp rise came as households stepped up spending during the festive season, using instant payments for everything from daily groceries and restaurant bills to online shopping and larger purchases.
UPI processed 25.47 billion transactions in October, compared with 24.07 billion in September, according to data released by the National Payments Corporation of India (NPCI). The number of payments increased 5.8 per cent month-on-month and was 23 per cent higher than the 20.7 billion transactions recorded in October last year.
The value of transactions also touched a fresh high. Payments worth ₹31.53 lakh crore were made through the platform during the month, against ₹29.37 lakh crore in September. This marked a 7.4 per cent increase over the previous month. Compared with October 2025, the total value was up 16 per cent from ₹27.27 lakh crore.
One of the most notable developments was the rise in the average daily value of UPI payments. For the first time, the figure crossed ₹1 lakh crore, reaching ₹1,01,707 crore in October. The average daily number of transactions also set a record at 822 million.
In September, UPI handled an average of 802 million transactions a day, with the daily transaction value at ₹97,913 crore. October therefore saw daily transaction volumes rise by about 2.5 per cent, while the average daily value increased 3.9 per cent. The figures underline how digital payments have become a routine part of spending for millions of people across the country.
The festive calendar played an important role in the increase. Navratri, Dussehra-related purchases and major online sale events took place during October, encouraging consumers to spend across both physical stores and e-commerce platforms. UPI offered a quick way to pay at neighbourhood shops, supermarkets, food outlets and large retail chains, while also supporting purchases made through shopping apps.
The increase was not limited to small-value payments. Industry executives pointed to a rise in spending on larger festive purchases as well as regular household expenses. Cashfree co-founder Reeju Datta said the value of payments grew faster than transaction volumes in September and October, after the average payment size had been declining for several months. This suggests that consumers were using UPI for bigger purchases in addition to frequent, everyday transactions.
The trend is significant because UPI has steadily moved beyond person-to-person transfers. It is now widely used for person-to-merchant payments, including payments at small businesses, retail outlets, restaurants and service providers. QR codes have made it easier for merchants to accept digital payments without investing in expensive point-of-sale equipment. For customers, the ability to pay directly from a bank account has reduced the need to carry cash for routine purchases.
The latest figures also come at a time when the payment industry is discussing the long-term financial sustainability of the UPI ecosystem. A proposed merchant discount rate (MDR) on select person-to-merchant transactions has been in focus. The framework was initially expected to be introduced on October 15, but its implementation was deferred until after Diwali.
MDR is a fee associated with processing a digital payment and is generally paid by merchants to payment service providers or banks. Any change to the fee structure could affect the cost of accepting digital payments, particularly for smaller businesses that depend on low-cost transactions. Industry participants have argued that the payment system needs a sustainable revenue model to support technology, security and service improvements, while keeping digital payments affordable for merchants and consumers.
The record October numbers show that the MDR debate has not so far translated into a visible fall in overall UPI activity. However, the impact of any eventual changes will depend on the final rules, the categories of transactions covered and how costs are shared across the payments ecosystem.
UPI’s growth has been supported by the expansion of smartphone access, wider internet connectivity, bank-account penetration and the spread of QR-code acceptance. Its instant settlement experience has also made it useful for people who may previously have relied mainly on cash. From splitting a restaurant bill to paying utility charges, buying tickets or shopping online, digital payments have become part of everyday life.
The October performance points to both the scale and changing nature of India’s digital payments market. A record 25.47 billion transactions and monthly payments worth ₹31.53 lakh crore show that UPI is handling a growing share of consumer activity. Crossing the ₹1 lakh crore mark in average daily transaction value is another indication of that reach.
As the festive spending period continues, the coming months will show whether the October surge marks a seasonal high or a new level of regular activity. For now, the latest NPCI data underline UPI’s central role in India’s shift towards convenient, real-time and increasingly cash-light payments.
