Recent reports suggesting a downturn in UPI usage are unfounded; official data shows continued expansion despite legal clarifications and slower growth rates, with cash usage also rising alongside digital transactions.
The Wire has drawn criticism for suggesting that Indians are shifting away from UPI towards cash after Parliament passed a Bill linked to merchant discount rates, or MDR, on some digital payments. But the bill does not itself impose any fee on UPI users. It amends the law to allow the government, by future notification, to decide whether certain payment modes may attract charges, leaving the actual design, scope and timing to the payment system’s steering committee headed by the National Payments Corporation of India.
That distinction matters. According to the reporting cited by the dispute, the relevant law only removes an earlier statutory bar on such charges; it does not put a levy into force. Government statements have also made clear that consumer payments are not expected to be charged, person-to-person transfers remain free and any future MDR would apply, if at all, only to a limited slice of merchant transactions. Trade body the Payment Council of India has likewise said small merchants and kirana stores will continue to accept UPI without paying MDR.
The numbers also do not support the claim that UPI is in decline. The Hindu’s analysis, which The Wire relied on, showed that UPI’s growth rate has slowed from the extraordinary triple-digit pace seen in its early years, but its absolute usage has kept rising sharply. Industry and official figures show UPI handled 24,161.69 crore transactions worth ₹314.23 lakh crore in FY26, up from 4,595.61 crore transactions worth ₹84.16 lakh crore in FY22. In March 2026 alone, it processed 22.64 billion transactions worth ₹29.53 lakh crore, while January 2026 also set a then-record high.
That pattern is not unusual for a mature payment network. UPI launched in 2016 and expanded rapidly as smartphone use, QR codes, zero MDR policy and wider bank participation pushed adoption across India. By June 2026, 55.49 crore users had been onboarded, and the system had become the country’s dominant real-time payment rail. As with any large platform, percentage growth naturally eases as the base gets bigger, even when the total number and value of transactions continue to rise.
The comparison with cash is also less dramatic than it sounds. The Hindu’s figures indicated that cash usage has increased too, but at a slower pace than UPI. That does not prove people are abandoning digital payments; it more likely reflects a larger economy in which both cash circulation and electronic transactions are expanding. UPI and cash can grow at the same time when nominal spending rises and households hold more liquidity for everyday use.
Some of the framing is also problematic because the article being criticised appears to compare a law passed on 6 August with UPI data running only to 9 August. On that basis, the suggestion that a nationwide shift from UPI to cash occurred within three days is not convincing. The latest available figures point instead to continued expansion, not retreat.
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