UPI continues to grow strongly, volumes up 23% at 24.07 bn in September | Finance News

Unified Payments Interface (UPI) volumes grew 22.6 per cent on a year-on-year basis to 24.07 billion in September 2026 as compared to 19.63 billion in September 2025. The value of transactions grew 18 per cent to Rs 29.37 trillion in September 2026 as compared to Rs 24.89 trillion in September 2025. 

However, on a month-on-month basis, UPI transactions declined 1.8 per cent from 24.51 billion in August, partly because September had 30 days compared with 31 days in August. Transactions in value terms fell by 1.5 per cent to Rs 29.37 trillion from Rs 29.82 trillion during the same period. 

The month-on-month decline is not unusual given the lower number of days in a particular month. Data shows that 10 (including September) of the past 24 months saw a low single-digit (1.0. to 2.3 per cent) decline in volumes on a month-on-month basis due to the lesser number of days in those months as compared to the previous month. On three instances, the decline was between 5.2 and 6.7 per cent. Of these, two were in the months of February (2025 and 2026), which have 2-3 days less as compared to January, and one was in November 2024, which can be attributed to Diwali being in October 2024.

The last 30-day month June had witnessed 22.72 billion transactions with a value of Rs 28.92 trillion. Daily transactions were seen at 757 million with a value of Rs 96,405 crore.

UPI clocked the highest average daily transaction volume of 802 million payments in September. The average daily value of all transactions put together was recorded at Rs 97,913 crore in the same month. 

Trade groups had previously raised concerns over the introduction of the merchant discount rate (MDR) — ending six years of zero-charge UPI transactions. Effective October 15, the NPCI will introduce an MDR structure for select UPI payments.

“This rise came from the start of the festival season. Ganesh Chaturthi fell in mid-September this year, and people began spending on festivities. From April to August, the money moving through UPI each day had stayed at around Rs 96,000 crore even as the number of payments grew, because most new payments were small,” said Reeju Datta, cofounder of Cashfree, a fintech firm.

“In September, the extra payments people made were bigger than usual, which lifted the daily value clearly above that level,” he said.

Peer-to-peer (P2P) UPI transactions will remain free, while peer-to-merchant transactions above Rs 2,000 will attract a 0.40 per cent fee, capped at Rs 300.

Datta said UPI will not be affected by MDR as it will still be cheaper than cards and is popular due to convenience. Payments to small vendors — called peer-to-peer merchants (P2PM) — will also remain free. P2PM merchants are small vendors receiving up to Rs 1 lakh a month through UPI.

 “As we enter the festival season, this momentum is likely to translate into greater digital payment activity as consumers increasingly turn to UPI for purchases across both online and offline channels,” said Deepak Chand Thakur, managing director and chief executive officer, NPST.