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India now makes faster payments than any other country with quick growth of UPI: IMF Note
Jul-11-2025

The International Monetary Fund’s (IMF) Fintech Note titled 'Growing Retail Digital Payments: The Value of Interoperability' has said that India now makes faster payments than any other country with the quick growth of Unified Payments Interface (UPI), and the usage of other instruments, including debit and credit cards, is on the decline. Unified Payments Interface is an instant and real-time payment system developed by NPCI to facilitate inter-bank transactions through mobile phones.

It said that since its launch in 2016, UPI has grown quickly, while some proxies for cash usage have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India. The note presents evidence consistent with this framework using granular data covering the universe of transactions on India's UPI, an interoperable platform that has become the world's largest retail fast payment system by volume.

It said that interoperable payment systems, such as UPI, are alternatives to closed-loop systems that could also foster the adoption of digital payments. Such systems allow for seamless payments between users of different payment providers. It said ‘Importantly, total digital payments also rise relative to a proxy for cash usage.’ Further, it said that estimating cash usage is difficult because cash transactions can occur anonymously and may not be recorded in any ledger, especially in the informal sector.

It said ‘However, we can approximate cash usage with the value of automated teller machine (ATM) withdrawals in each district. When we measure the impact of integration on transaction values relative to cash withdrawals, we find a very similar picture.’ It added This evidence suggests that interoperability can indeed support the adoption of digital payments and encourage a transition away from cash.


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