The Unified Payments Interface (UPI), a real-time digital payment system, maintained its dominance, with transactions during the Dhanteras-to-Diwali period increasing faster than any other mode of payment, according to an analysis of NPCI data.

Average UPI volumes over the three-day period increased to 737 million per day from 568 million in the same period last year, representing a 30 percent increase in transaction count.

Key Highlights

• UPI transactions surged 30% during Diwali, with 737 million daily transactions, outpacing debit cards.
• Credit card e-commerce volumes grew 22%, while debit card usage declined 24% during the festive season.

UPI transactions have tripled over the last four years

While the total value increased by only 2.7 percent, the smaller increase indicates that low-ticket retail and merchant payments now account for a larger share of overall digital transactions.

Scan, Swipe, and Click: Cards Keep E-Commerce Strong

Debit-card payments continued to decline, with PoS volumes and values falling 11 percent and 9 percent, respectively. Prepaid instruments (PPIs), such as wallets and gift cards, experienced the steepest decline — 26% in volumes and more than 50% in value — indicating their decreasing relevance in a UPI-first ecosystem.

For the second year in a row, credit-card e-commerce transactions outpaced PoS (point-of-sale) swipes — 4.8 million versus 4.2 million — indicating that online retail dominated in-store purchases during Diwali.

However, growth momentum slowed: overall credit-card transaction volumes increased 22 percent, compared to 25.5 percent a year ago. Offline spending, on the other hand, rebounded sharply, with PoS transaction volumes rising 15.6 percent, the highest in three years, after falling 0.9 percent during the previous holiday season. 

Credit card transactions have grown at a rapid pace

Debit-card payments continued to decline, with PoS volumes and values falling 11 percent and 9 percent, respectively. Prepaid instruments (PPIs), such as wallets and gift cards, experienced the steepest decline — 26% in volumes and more than 50% in value — indicating their decreasing relevance in a UPI-first ecosystem.

Also Read: Diwali Sales Hit Record Rs 5.4 Lakh Cr on Strong Demand

UPI’s Unstoppable Run

UPI's rapid rise stands out. Over the last three Diwalis, UPI transaction volumes have tripled, from 245 million in 2022 to 737 million in 2025, with total transaction value more than doubling to Rs 87,569 crore.

A previous analysis found that credit cards are driving the festive e-commerce boom, aided by additional discounts on Flipkart, Amazon, and other apps. Credit-based transactions increased by 26.8 percent during Navratri 2025, while debit-card payments fell for the third year in a row, and UPI growth moderated slightly.

Policy tailwind for consumption

The government expects that the GST rate reduction, which begins on September 22, will sustain consumer momentum beyond the festive season.

"Because of the GST reforms, consumption will be significantly increasing, and it's very likely that consumption will increase more than 10 percent this year, which means there is a strong possibility of extra consumption of around Rs 20 lakh crore," according to Union Minister Ashwini Vaishnaw on October 18.