Digital payments to grow 3X in five years in terms of value to Rs 907 trillion: Report
"Credit cards are witnessing robust growth, with volumes and values projected to grow at 21.7% and 20.8% compound annual growth rate (CAGR)," said the report.
India’s digital payments landscape is poised for a transformative leap, with transactions expected to surge threefold over the next five years, PwC’s Indian Payments Handbook 2025-2030 said on Wednesday.
The total volume of digital payments is projected to rise from 206 billion in FY25 to 617 billion by FY30, while the value is set to expand from Rs 299 trillion to Rs 907 trillion.
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The influence of AI is another dominant theme, as 73% of respondents expect Gen AI and Agentic AI to significantly impact the payments landscape.
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At the forefront of this growth is the Unified Payments Interface (UPI), which continues to dominate India’s retail payments ecosystem, accounting for nearly 90% of total transaction volumes, the report highlighted.
With innovations such as biometric authentication, IoT-enabled transactions, and cross-border payments, UPI is on course to hit 1 billion transactions per day by FY28. However, PwC cautioned that signs of saturation are emerging, necessitating new use cases and infrastructure enhancements to sustain momentum.
Credit cards are another strong growth engine, with transaction volumes and values projected to rise at 21.7% and 20.8% CAGR, respectively. The linking of RuPay credit cards with UPI, increasing co-branded partnerships, and the potential entry of NBFCs into card issuance are reshaping consumer credit behavior.
In contrast, debit card usage continues to decline, largely due to UPI’s convenience and lack of usage incentives.
PwC’s Indian Payments Handbook also noted that the merchant acquiring space is witnessing rapid digitisation, driven by QR codes and soundboxes, especially in Tier 2-4 cities. Real-time settlements and AI-powered fraud detection tools are deepening digital adoption among merchants.
PwC noted that platforms like Bharat Connect (earlier BBPS) and FASTag are diversifying rapidly. Bharat Connect has expanded into sectors such as healthcare, education, and housing societies, while FASTag is moving beyond tolls into parking and fuel payments.
Meanwhile, Prepaid Payment Instruments (PPIs) are rebounding due to new regulatory clarity and UPI integration, with forex, corporate gifting, and mobility cards expected to lead growth.
India’s position as the world’s top remittance recipient continues to strengthen, backed by cross-border UPI corridors and RBI’s Payment Aggregator–Cross Border (PA-CB) licences.
PwC highlighted several emerging technologies shaping the sector’s next phase, including agentic AI, distributed ledger technology, and biometric security, supported by RBI’s regulatory innovations such as the PRAVAAH portal, Self-Regulatory Organisation (SRO) framework, and offline payment aggregator guidelines.
The report concludes that India’s payments evolution is now less about scale and more about value creation. “The next five years will be defined by data-driven, customer-centric innovation,” it said, predicting a shift toward a resilient, inclusive, and globally connected payments ecosystem.
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