UPI Transactions Reach Record 25.47 Billion in October Driven by Festival Shopping

Unified Payments Interface (UPI) transactions rose 5.8 per cent month-on-month to reach 25.47 billion in October, according to data released by the National Payments Corporation of India (NPCI). The total transaction value for the month touched ₹31.5 lakh crore. Festival shopping, Navratri, and online sales served as the primary drivers for digital payments growth during the period.

The overall transaction value grew 16 per cent year-on-year. This growth rate was slower than the 23 per cent increase recorded in transaction volumes. Industry stakeholders noted that this discrepancy was partly due to the shifting festival calendar, as Dhanteras and Diwali fell in November this year compared to October in the previous year.

Following a prior trend where average transaction sizes had been declining, September and October observed transaction values growing faster than volumes. This shift indicates an increase in the average value per transaction. By the end of September, 756 banks had gone live on the UPI platform.

Anand Kumar Bajaj, Founder, MD and CEO of PayNearby, remarked that UPI continues to simplify financial interactions and enhance accessibility across various sections of society.

Reeju Datta, Co-founder of Cashfree, stated that UPI processed more than ₹1 lakh crore in payments a day for the first time. He reiterated that the calendar shift of Diwali and Dhanteras into November explained why transaction values grew at 16 per cent while volumes rose by 23 per cent over last October.

Datta noted that transaction activity is expected to pick up further in November as the peak festival shopping days approach. He added that the critical metric to observe following the festival season will be whether users maintain the habit of using UPI for larger-value payments.

Akshay Mehrotra, MD and Group CEO of Fibe, observed that the festival season accelerated spending across retail categories including shopping, travel, dining, and lifestyle. He anticipated that purchases of electronics, apparel, gifts, and household essentials would increase ahead of Diwali, with Dhanteras anticipated to drive higher-value transactions in gold and traditional purchases.

Mehrotra also addressed questions concerning the long-term commercial sustainability of digital payments infrastructure amidst rising transaction volumes. He pointed to the proposed Merchant Discount Rate (MDR) framework, which was initially scheduled for October 15 and reportedly deferred until after Diwali, as a focal point for the industry. He emphasized the importance of maintaining affordability for consumers and merchants while ensuring the ecosystem remains commercially viable.

"The steady rise in UPI transaction volumes and values during October highlights the deep integration of digital payments into everyday consumer behavior in India. While festival calendars naturally influence month-on-month spending patterns, the broader trend of increasing average transaction sizes points to growing user trust. As the digital payments ecosystem continues to scale, addressing commercial sustainability and the merchant discount rate framework will be critical for long-term growth across financial technology platforms." — Dr. Shishir Gupta, Founder & CEO, StartupLanes