India’s digital merchant payments soar 19.6% in July as UPI dominates record transactions

India’s digital merchant payments experienced a sharp 19.6% year-on-year increase in July, driven by record-breaking UPI transactions and rising credit card usage, signalling a deepening shift away from cash towards digital commerce.

India’s digital merchant payments continued to expand sharply in July, with spending rising 19.6% year on year to Rs 11.73 lakh crore, according to data compiled by Equirus Securities and reported by IANS. The increase came as UPI-based merchant payments and credit card spending remained the main engines of growth, underscoring how quickly India’s payments market continues to shift away from cash.

Unified Payments Interface transactions to merchants, or UPI-P2M, rose 23.5% from a year earlier to Rs 9.066 lakh crore and accounted for 77.3% of all digital merchant payments in July. LiveMint separately reported that the wider UPI network processed a record Rs 29.9 lakh crore across 23.66 billion transactions in the month, highlighting how central the rail has become to everyday commerce.

Credit cards also posted solid growth, with spending climbing to Rs 2.081 lakh crore and the number of cards in force rising to 122.9 million. E-commerce remained the largest use case for cards, making up 63.6% of total spending, while average monthly online spending per card and point-of-sale spending per card both increased, according to the Equirus data reported by IANS.

Smaller payment instruments also showed gains, although debit card spending slipped slightly from a year earlier. Prepaid cards and wallets together contributed about Rs 20,300 crore in July, rising 41.1% year on year. The broader picture points to an increasingly layered payments market in which UPI dominates volume, credit cards continue to deepen their role in higher-value spending and digital commerce remains firmly in expansion mode.