In India, digital payments are no longer just a convenience, but a national habit. Even in remote areas, people are easily transacting through apps. Now, the government is preparing to take this revolution to an unprecedented level: the need to enter a PIN for UPI payments may be eliminated! The government is soon considering making payments even easier through Aadhaar-based biometric authentication. In August 2025, the number of UPI transactions crossed 20 billion for the first time, demonstrating that digital payments have become the backbone of India’s financial system.
Aadhaar Biometric Payments
The UPI payment feature using biometric authentication is expected to launch soon. This crucial feature is expected to be unveiled during the Global Fintech Festival 2025. This move will further strengthen the digital payments revolution in India.
What is a Digital Payment System
Digital payments simply mean payments made through digital means, such as debit cards, mobile apps, or internet banking, instead of cash. This process is fast, secure, and completely transparent, making it extremely easy for both customers and merchants to track transactions.
Major Digital Payment Systems in India
This is a real-time payment system developed by NPCI.
Plastic cards are issued by companies like Visa and Mastercard.
Account management and payments through the bank’s website.
Apps like Paytm and PhonePe allow you to make payments by adding funds to your account.
Payments using Aadhaar number and biometrics which are primarily used in rural areas.
Transaction Method
Digital transactions typically occur between three parties: the customer, the payment service provider (such as a bank or payment app), and the recipient (such as a shop or service provider). When a customer makes a payment, the payment system processes it, verifies it, and then transfers the amount.
A Huge Boost to the Economy
India is one of the world’s fastest-growing economies, and digital payments are driving unprecedented growth. Digital transactions help the government keep better records of transactions. They also curb black money and tax evasion, leading to a significant increase in revenue. RBI Governor Sanjay Malhotra recently clarified that there will be no fees on UPI transactions.
According to the ACI Worldwide Report 2024, India alone will account for 49% of the world’s total real-time transactions in 2023. In the financial year 2022–23, India’s digital economy contributed ₹31.64 trillion, representing 11.74% of the gross domestic product (GDP). It also employed 14.6 million people.
The Future of Digital Payments in India
According to a report by Boston Consulting Group and PhonePe, India’s digital payments market will surpass $10 trillion by 2026. According to a PwC report, digital transaction volume could reach ₹617.3 billion and value ₹907.3 trillion between FY25 and FY30. The Kearney-Amazon Pay report estimates India’s retail digital payments market will exceed $7 trillion by 2030. These impressive figures paint a powerful picture of India’s digital future.