Kolkata: Is cash still the new king? Probably not, if a finance ministry report is to be believed. UPI has not only become the most widely used payment method but also has left cash far behind. The fin min report has stated that while UPI accounts for 57% of the total transactions in the country, cash has shrunk to 38%. This report was released by the Department of Financial Services (DFS) of the Ministry of Finance. To raise the share of online and digital methods of payment, the government is going to take new steps to push the use of RuPay debit cards in rural areas and smaller towns.
Digital is king
The dominance of digital payments is becoming more and more pronounced, said the government. About 65% of UPI users make digital payments multiple times daily for grocery bills, utility bill payments, online orders or sundry small purchases. This clearly indicates that mobile payments have become a habit, especially in cities and smaller towns.
The report is titled “Socio-economic Impact of the Scheme to Promote RuPay Debit Cards and Small-Value BHIM-UPI Payments” and was conducted among more than 10,000 people across 15 states, including users, shopkeepers, and service providers. It claimed that people from different income groups, urban and rural areas, and occupations are resorting more and more to digital payments.
Special RuPay debit card drive
The report also noted that while UPI is growing rapidly, RuPay debit card usage has not grown as fast, and this is true especially in rural and semi-urban areas. To push its use, the recommendations featured steps to:
- Enable merchants to accept card payments
- Promote features such as UPI Lite for small payments
- Strengthening internet and network connectivity
- Increasing digital literacy
- Strengthening fraud prevention measures
The government has spent a lot of money in the past few years to promote digital payments. Between FY22 and FY25, a whopping amount of Rs 8,276 crore was spent in incentives to promote RuPay card and small UPI payments. The amounts spent in the different years were 1,389 crore, Rs 2,210 crore, 3,631 crore and 1,046 crore in FY22, FY23, FY24 and FY25 respectively.
Value of UPI payments
In early Feb, the government informed the Rajya Sabha that UPI transactions rose to a record of Rs 230 lakh crore in 2025-26 till December. “As far as domestic transactions are concerned, transactions worth a total value of Rs 230 lakh crore have been made till December in the year 2025-26. This is against total transaction value of Rs 139 lakh crore in the year 2022-23,” the minister informed the Upper House of the Parliament.