UPI boom not quite uniform across states

MUMBAI: India's digital payments surge is less uniform than headline numbers suggest. Adjusted for population, Maharashtra, the largest state economy, records almost seven times the per-capita UPI transactions of Bihar. Telangana, ranked second, posts more than six times the average of Tripura.

Karnataka, Tamil Nadu and Kerala sit well above the national mean, while Jharkhand, Assam and West Bengal languish at the bottom, highlighting a persistent digital divide.

A per-capita reading of Unified Payments Interface usage as of Nov 2025 strips away the distortions of size. Normalising state-wise volumes and values by population using Unique Identification Authority of India data reveals sharp differences in adoption depth.

UPI handles more than 20 billion transactions a month and accounts for about 85% of digital payments, yet usage intensity tracks income, urbanisation and merchant acceptance rather than scale alone.

Once population is factored in, small and urban regions dominate. Delhi leads with about 23.9 transactions per person a month, followed by Goa at 23.3, Telangana at 22.6 and Chandigarh at 22.5. Among large states, Maharashtra stands out at roughly 17.4 transactions per person, reflecting dense urban networks and high QR acceptance.

Beyond financial inclusion, UPI also serves as a proxy for economic activity.

Value metrics underline digital depth. Telangana leads with per-capita monthly UPI value of around Rs 34,800, ahead of Goa at Rs 33,500 and Delhi at Rs 31,300. The pattern points to routine use for higher-ticket payments across organised commerce and professional services.

At the other end, adoption remains shallow. Tripura and Bihar average fewer than four transactions per person a month, with values of around Rs 5,100 and Rs 5,400. Jharkhand, Assam and West Bengal cluster close behind.

A resident of Delhi transacts roughly six times as often via UPI as one in Bihar or Tripura, pointing to large gaps in person-to-merchant infrastructure across eastern and north-eastern India.

Regional patterns reinforce the picture. A south-west corridor running from Maharashtra through Karnataka to Telangana shows consistently high frequency and value, signalling mature ecosystems.

The north-east is mixed. Tripura and Assam lag, while Arunachal Pradesh and Sikkim record relatively higher per-capita use, possibly reflecting terrain-driven reliance on digital substitutes for cash.

The upshot is a multispeed digital economy. As UPI pushes into its next growth phase, narrowing the per-capita gap will depend on wider smartphone access, more reliable networks and faster merchant onboarding in lagging states.