How India pays online: UPI leads with 65% share, EMIs make up 20%—in charts

India's digital payment ecosystem has transformed in the past few years, with the Unified Payments Interface (UPI) emerging as the most preferred way of payment. According to a report by omni-channel payment processing platform, Phi Commerce, UPI transactions accounted for a commanding 65% of all digital payment volumes in 2024.

Payments via equated monthly instalment (EMI) options comprised 20% of the transaction volume in 2024, while credit cards accounted for 10%. Traditional payment methods like net banking and direct transfers were reduced to just 5% of the total volume, as per the analysis, which was based on digital transactions across 20,000 merchants through Phi Commerce's payment gateway.

The report highlighted how payment preferences vary significantly across different sectors. In retail, food and beverage, and e-commerce, UPI commanded more than two-thirds of all transactions, with EMI options and credit cards capturing most of the remaining share, particularly for higher-value purchases. The automotive and ancillaries sector showed a different pattern, where credit cards and EMI options dominated due to the high-value nature of purchases.

Also read | UPI transactions soar in FY25 but fell short of govt's target

Enhancing financial inclusion

The public sector has also fully embraced digital solutions, utilising UPI and direct transfers for everything from tax collection to subsidy disbursements, greatly enhancing efficiency, transparency, and financial inclusion. 

Such government-backed digital payment incentives have accelerated adoption in rural and semi-urban areas, furthering financial inclusion across the country. 

Healthcare payments, especially for doctor consultations and pharmacy bills, were predominantly made through UPI, the report showed. Educational institutions are also increasingly adopting EMI-based payment solutions to facilitate manageable instalments for tuition fees, while edtech startups are introducing flexible payment schemes to improve accessibility.

Seasonal spikes

The report also identified distinct seasonal patterns in transaction volumes. The education sector experienced a significant spike in August coinciding with admission cycles, while healthcare showed increased activity in March due to insurance renewals. 

Retail saw peak periods in June, November, and December driven by holiday seasons and year-end promotions, with e-commerce similarly experiencing notable increases during festive sales periods.