The Unified payment interface (UPI) has changed how individuals in India pay for things online. The National payments corporation of India (NPCI) started UPI in 2016, and it has since become the most popular way to pay online in India.
So, this blog gives a brief history of UPI Payment along with its growing demand, purpose it serves and its future outlook.
When Did It start?
The National payment corporation of India (NPCI) was established in April 2009 to unify payments system across the world. By 2011, the RBI observed low digital adoption, with only six non-cash transactions per person annually, despite 10 million retailers accepting cards and 145 million families lacking banking access.
To counter cash-based corruption and promote financial inclusion, RBI issued a 2012 vision for a secure, efficient and eco-friendly payment framework. In 2016, UPI was launched, and by 2020, India surpassed China and the US with 25.5 billion real time transaction, becoming the world’s largest digital payments market.
Growing Demand for UPI Payments in India
The story of digital payments in India has blown up. In June 2025 alone, UPI processed 24.03 lakh crore across 18.39 billion transactions. In July 2025, monthly transactions reached 19.47 billion with a value of 25.08 lakh crore. The UPI network crossed 20 billion transactions for the first time in August 2025. These statistics reflect a vast shift as more individuals and merchants prefer digital mode.
Increasing smartphone penetration, government incentives and expanding bank connectivity are fuelling the dependence on UPI.
For What Purpose India Uses UPI Payments?
Today, Indians are dependent on UPI for a wide variety of needs, making it the most preferred digital payment app method.
· Retail and Grocery
Consumers are regularly using UPI to purchase groceries, pay at supermarkets or local stores. So, this mode has replaced small cash payments, thus helping retailers avoid counting cash daily.
· Bill Payments and Utilities
Electricity, water, telecom and streaming bills are routinely settled via UPI apps. Hence, UPI apps like Navi provide the convenience of scheduling or real time pay enhances user experience.
· Merchant and Online Purchase
Small business, grocery shops and online merchants accept UPI QR payments. Thus, the system empowers micro and small enterprise to go digital without heavy infrastructure.
· Credit and Loan Disbursement
Banks are starting to tie credit lines or micro-loans to the UPI infrastructure. It also allows disbursements or repayments over UPI channels conveniently.
Hence, UPI has deeply become involved in daily financial habits, transforming how people and business transact.
Future Outlook
UPI’s growth in India doesn’t seem to be slowing down. Fintech innovations are always adding new features to the system, which keep it working and makes it better overtime. India’s UPI has changed the way people use digital payments in the country. So, it is changing the way they interact with money and the payments landscape.
AI and biometrics could help UPI grow into a single unified channel that would work in a wide range of financial ecosystem. Hence, in future, UPI can be used for everything from AI-powered financial tools to transaction based on biometrics.
UPI payment has not only changed the way India does business, but it has also made the country a world leader in digital payments, UPI has been a key player in fostering financial inclusion and speeding up the country’s move toward a cashless economy. UPI applications like Navi provide a smooth, safe, and easy-to-use platform for both individuals and businesses.
