UPI Dominates Festive Spending with Record Rs 17.8 Lakh Crore Transactions
Unified Payments Interface (UPI) emerged as India’s most preferred payment method during the festive season, with transaction values surging to Rs 17.8 lakh crore according to a Bank of Baroda report. This represents a significant jump from Rs 15.1 lakh crore during the same period last year, indicating strong consumer spending and demand revival.
Key Highlights
- UPI transactions reached Rs 17.8 lakh crore during festive season
- Debit card payments surged to Rs 65,395 crore, breaking past decline trends
- Combined payment modes totaled Rs 18.8 lakh crore in retail transactions
- Consumers showed preference for digital and debit payments over credit cards
Digital Payment Growth Accelerates
In September 2025, UPI recorded a 2.6% month-on-month increase in transaction value, demonstrating steady digital payment adoption. The festive period saw particularly strong performance across major festivals including Dussehra and Diwali.
Debit card usage witnessed remarkable growth, with payments rising to Rs 65,395 crore compared to Rs 27,566 crore the previous year. This resurgence breaks the trend of declining debit card usage observed in past periods.
Spending Patterns and Consumer Behavior
Average transaction values revealed distinct usage patterns: debit cards led with Rs 8,084 per transaction, followed by credit cards at Rs 1,932 and UPI at Rs 1,052. This indicates UPI remains the preferred choice for small to mid-value purchases, while debit cards serve higher-value transactions.
Credit card transactions showed restraint, suggesting consumers favored direct digital and debit-based payments for their festive shopping needs.
Sector-Wise Growth and Economic Impact
Bank of Baroda’s category analysis showed double-digit year-on-year growth across multiple sectors in September 2025:
- Online marketplaces
- Apparel outlets
- Electronic shops
- Beauty and barber establishments
- Liquor shops
This growth signals strong festival-linked demand, potentially boosted by recent GST rate cuts and income tax benefits announced in the budget.
Positive Consumption Outlook
The bank’s analysis, adjusted for festival days, confirms the transaction volume increase reflects genuine consumption demand improvement. Structural factors including tax benefits and expected GST cuts have encouraged higher household spending.
“We expect private consumption demand to report a buoyant print in Q2. The trend will also persist in Q3,” the report noted.
The combined payment data totaling Rs 18.8 lakh crore points to an upbeat retail transaction trend, serving as an early indicator of consumption revival in the current quarter.
