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The recent monthly figures of Unified Payments Interface (UPI), which has become the lifeline of Indian digital payments, have sparked a new debate in the financial and technology world. According to the latest data released by National Payments Corporation of India (NPCI), both the total number of UPI transactions and their total value in the month of September have declined as compared to the previous month i.e. August.
The biggest reason for this decline is believed to be that there is confusion among traders and consumers regarding the proposed Merchant Discount Rate (MDR) to be implemented from October 15. A perception has started forming in the market that people are now staying away from UPI due to the fear of being charged. However, when these data are analyzed in depth technically and statistically, the picture appears different.
According to the official dashboard of NPCI, the total UPI transactions in September were as follows:
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Transaction Volume (total number of transactions): A record 24.51 billion (2,451 crore) transactions were done through UPI in August. This number declined by 1.8% to Rs 24.07 billion (2,407 crore) in September.
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Transaction Value (Total Amount): The total amount of transactions also declined marginally by 1.50%. While there were transactions worth ₹29.82 lakh crore in August, this figure was recorded at ₹29.37 lakh crore in September.
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Strong growth on annual basis (YoY Growth): Despite the monthly decline, UPI’s dominance continues on a year-on-year basis. A significant jump of 23% in transaction volume and 18% in transaction value has been observed compared to September 2025.
According to economists and fintech experts, it is too early to see this 1.8% decline as a declining trend towards UPI.
There are two major basic reasons behind this:
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Difference of number of days: The month of August has 31 days, while September has only 30 days. If we compare the Daily Average Transactions, in August an average of 79.1 crore transactions were taking place every day, whereas in September the daily average increased to 80.2 crore transactions. That means transactions on daily basis have not decreased but have increased.
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Daily Value Jump: The average daily turnover in September was approximately ₹97,913 crore, which proves that consumers are using UPI more than ever for everyday payments.
Amidst the discussions about the decline, the biggest question is regarding the charge which is said to be implemented from October 15. There are some misconceptions spread among the general public and small shopkeepers regarding this:
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Completely free for general users: NPCI and the Finance Ministry have repeatedly clarified that no additional charges will be levied on the general public on person-to-person (P2P) and person-to-merchant (P2M) transactions. UPI payments directly from the customer’s bank account will remain free as always.
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Limited rules on large merchant transactions: Under the proposed rules, there is talk of imposing a tier based merchant discount rate (MDR) of up to 0.40% on select commercial payments above ₹2,000, the maximum limit of which has been fixed.
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Traders protest: Many merchant organizations have expressed concern over the impact on margins and recently met the Finance Minister and put forth their demands, leading to isolated incidents of merchants removing QR codes or demanding cash at some places.
In big cities like Lucknow, the capital of Uttar Pradesh, Kanpur, Delhi, Jaipur, Bengaluru or Mumbai, the festive season (Dussehra, Diwali, Dhanteras and Chhath) will gain full momentum from the month of October.
There is a huge increase in shopping, e-commerce sales, travel ticket booking and gift transactions during the festival season. Experts believe that this slight fluctuation in September is only a technical adjustment. UPI once again has the potential to touch a new record high of more than Rs 25 billion on the back of festive shopping in the months of October and November.