UPI Transactions See Mild Decline to 18.40 Billion in June

India’s widely used real-time payment system, the Unified Payments Interface (UPI), saw a slight decline in monthly transaction volume in June 2025. According to data released by the National Payments Corporation of India (NPCI), the number of UPI transactions stood at 18.40 billion, down from the record high of 18.68 billion in May.

Year-on-Year Growth Remains Strong

Despite the month-on-month dip, UPI transactions surged 32% compared to June 2024, indicating robust year-on-year growth. UPI continues to be the most preferred method of digital payments in India, driven by ease of use, interoperability, and widespread merchant adoption.

Transaction Volume Still Higher Than April

When compared to 17.89 billion transactions in April, June’s figures reflect a 2.9% increase, showing that the platform remains on a strong upward trajectory even with short-term fluctuations.

Total Value of Transactions Declines

While the number of transactions dipped slightly, the total value processed through UPI also decreased. In June, the transaction value stood at INR 24.04 Lakh Crore, down 4.4% from INR 25.14 Lakh Crore in May. This indicates that although transaction frequency is high, the average transaction value may have moderated.

Average Daily UPI Activity Rises

Interestingly, average daily transactions rose to 613 million in June, up from 602 million in May. The average daily transaction value was recorded at INR 80,131 Crore, underlining the increasing role of UPI in everyday payments across individuals and businesses.

India Leads Global Real-Time Digital Payment Adoption

At the Digital Payments Award 2025, Finance Minister Nirmala Sitharaman highlighted India’s global leadership in real-time digital transactions. She revealed that India accounts for 48.5% of all real-time digital payments worldwide, with over 35 crore users on the UPI platform.

UPI Expands Internationally

India is actively working to make UPI globally accessible. Currently, merchants in seven countries—Bhutan, Nepal, Mauritius, Sri Lanka, UAE, Singapore, and France—accept UPI payments. This expansion supports India's goal to make UPI a globally recognized payment system.

NPCI Implements Faster Payment Processing Rules

To enhance payment efficiency, the NPCI introduced new rules in June aimed at improving UPI response times. Under the latest guidelines:

• Remitter banks, beneficiary banks, and payment service providers (PSPs) are required to respond to UPI API requests within 10 seconds for specific types of transactions.

• These rules are expected to minimize payment delays and further streamline real-time money transfers.

Speculation Around MDR Sparks Debate

Reports Suggest Government May Reintroduce MDR

Recently, reports surfaced suggesting that the government may levy a merchant discount rate (MDR) on UPI transactions exceeding INR 3,000. However, the Ministry of Finance denied these claims, calling them "hypothetical, unfounded, and misleading."

Industry Groups Urge Reconsideration of 0% MDR

Earlier this year, the Payments Council of India (PCI) had written to Prime Minister Narendra Modi, urging him to reconsider the zero-MDR policy for UPI and RuPay transactions. The council cited concerns over sustainability for banks and fintechs that bear the infrastructure cost.

Government Reaffirms Commitment to Free Digital Payments

In its official statement, the Finance Ministry assured citizens that the government remains fully committed to promoting free digital transactions via UPI. It urged people to ignore sensationalized reports that generate unnecessary concern and confusion.

The 0% MDR policy, introduced in 2020, was aimed at encouraging digital adoption. However, critics argue that the lack of revenue from UPI transactions discourages private players from investing further in digital infrastructure, potentially affecting long-term innovation.

Conclusion: UPI Remains Strong Despite Minor Dip

While June saw a slight decline in UPI usage compared to May, broader indicators show continued momentum in India’s digital payments growth. With policy support, technological upgrades, and increasing global reach, UPI is poised to remain central to India’s fintech story.