Digital Payments to Merchants Rise 19.6% to Rs 11.7 Trillion in July

Digital Payments to Merchants Rise 19.6% to Rs 11.7 Trillion in July

New Delhi, August 28: Digital payments made to merchants across India rose 19.6 per cent year-on-year to around Rs 11.7 trillion in July 2026, highlighting the continued shift towards digital transactions among consumers and businesses.

The growth comes amid sustained expansion in India’s digital payments ecosystem, with Unified Payments Interface (UPI) continuing to play a central role in everyday retail transactions. According to data from the National Payments Corporation of India (NPCI), UPI processed a record 2,365.8 crore transactions in July, with the total value reaching around Rs 29.87 lakh crore.

The July UPI figures represented the highest monthly transaction volume recorded since the platform was launched in 2016. Transaction volumes had crossed the 2,300-crore mark for the first time in May, before rising further in July, underscoring the rapid adoption of real-time digital payments.

The rise in merchant payments reflects the growing use of digital transactions for everyday purchases, ranging from small retail payments and food and grocery purchases to payments for services and larger transactions. QR-code payments and smartphone-based payment applications have also made it easier for small businesses and merchants to accept electronic payments.

UPI’s growing penetration has been particularly significant for small-value transactions. Industry data cited by the India Brand Equity Foundation shows that person-to-merchant payments accounted for about 63 per cent of UPI transaction volume, while 86 per cent of P2M transactions in FY2026 were below Rs 500.

For merchants, the expansion of digital payments can improve transaction convenience, reduce dependence on cash handling and create electronic records of sales. For consumers, instant payments provide a faster and increasingly familiar alternative to cash and traditional payment methods.

The broader digital payments expansion is also contributing to India’s financial inclusion and formalisation objectives. As more small businesses accept digital payments, transaction histories can potentially support access to formal financial services and technology-enabled business solutions.

The growth comes as UPI marks a decade since its launch. The government said the number of banks live on the UPI platform had reached 741 by July 2026, compared with 21 banks at the time of its launch. UPI accounted for about 84 per cent of India’s digital payments in FY2025-26, according to government data.

The platform is also expanding its international footprint, with UPI operational in countries including the UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, Mauritius and Qatar. The government has highlighted the system’s interoperability and scale as key factors behind its growing global recognition.

The latest merchant-payment figures therefore point to a broader structural change in India’s payments landscape. With consumers increasingly accustomed to instant digital transactions and merchants expanding acceptance infrastructure, digital payments are becoming an integral part of everyday commerce and India’s wider digital economy.