India has emerged as the global leader in fast digital payments, according to a recent report published by the International Monetary Fund (IMF). The country’s revolutionary Unified Payments Interface (UPI), launched in 2016, has dramatically changed how money is transferred, making transactions seamless, instant, and widely accessible. Processing over 18 billion transactions every month, UPI now dominates the electronic retail payments space in India. The IMF’s technical note, “Growing Retail Digital Payments: The Value of Interoperability,” highlights UPI’s success in reducing cash dependency and enabling real-time digital transactions at an unprecedented scale.
The report emphasizes that the key to UPI’s widespread adoption lies in its interoperability — the ability for users to send and receive payments using any app, regardless of the bank or service provider. This feature, according to the IMF, not only enhances user convenience but also fosters competition among payment platforms, driving innovation and better user experiences. The Bharat Interface for Money (BHIM) app, launched by the National Payments Corporation of India (NPCI) in 2016, played a catalytic role in kickstarting the digital payment ecosystem. Initially accounting for more than half of UPI’s transaction volume, BHIM laid the foundation for the entry and growth of private fintech players who have since transformed the payment landscape.
The IMF report also notes the importance of public sector involvement in overcoming early adoption barriers, such as the lack of quality apps and user trust. By building a robust and open infrastructure like UPI on the IMPS backbone, and encouraging innovation through interoperability, India has created a model worth replicating worldwide. As of June 2025, UPI transactions grew by 32% year-on-year, with 613 million transactions being recorded daily — a testament to its growing popularity. For countries aiming to reduce cash reliance and increase financial inclusion, India’s digital payment journey offers a compelling roadmap for transformation.
