India’s retail payments now 99.8% digital: CareEdge

Cards and prepaid instruments are stable or in decline as UPI increases in popularity.

Retail payments in India are now 99.8% digital, with paper-based instruments— primarily cheques— now “nearly obsolete”, CareEdge said in a report.

Digital payments— including UPI, AePS, IMPS, and others— dominate retail transactions and account for 92.5% of the payment value and 99.9% of transaction volume.

Cards and prepaid instruments are stable or in decline, meanwhile, as UPI substitutes for low-value transactions, CareEdge noted.

Rising internet penetration, which stood at 70.9% in June 2025 and is expected to rise to at least 85% in 2028, as well as  smartphone usage have accelerated this shift, CareEdge said.

These have also enabled financial inclusion by bringing previously unbanked populations into the formal digital economy.

The government and the Reserve Bank of India’s (RBI) promotion of digital adoption, especially in Tier 2 and Tier 3 cities, has accelerated digital payments adoption in underserved regions. The RBI Digital Payments Index (RBI) rose to 493.22 in March 2025 from 445.50 in March 2024.