3 min readNew DelhiFeb 16, 2026 08:56 PM IST
While the Unified Payments Interface (UPI) has become the preferred mode of payment across categories for Indians, its future and that of RuPay lies in value-added services that go beyond just the convenience with which transactions can made, according to a study released by the Ministry of Finance’s Department of Financial Services.
Released at the two-day ‘Chintan Shivir’, or brainstorming session, held on February 13-14 in at Coorg, Karnataka, the report titled ’Socio-Economic Impact Analysis of the Incentive Scheme for Promotion of RuPay Debit Card and low-value BHIM-UPI (Person-to-Merchant) transactions’ is based on a study carried out by an independent third-party research agency in consultation with the National Payments Corporation of India (NPCI).
Started in 2021-22, the aforementioned incentive scheme saw the government’s payout rise from Rs 1,389 crore to Rs 3,631 crore in 2023-24 as it looked to ensure digital payments remained accessible to everyone.
“The future of UPI and RuPay lies in value-added services that go beyond transactional convenience. Integrating micro-credit, insurance, and loyalty programmes within payment platforms can deepen engagement and drive financial inclusion,” the study, made public by the Ministry of Finance on Monday, said.
“Advanced features like AutoPay, Credit Line, and UPI IPO must be promoted through gamified onboarding and targeted campaigns to close awareness gaps. Scheduled payments for education, healthcare, and OTT (Over-The-Top) subscriptions can unlock new use cases, making digital payments indispensable in everyday life,” it further said.
According to the study – conducted in July-August 2025 and covering 10,378 respondents from 15 States, including 6,167 users, 2,199 merchants, and 2,012 service providers – while UPI has emerged as the preferred mode of payment across categories with high transaction value and volume growth rates, the ecosystem “still faces infrastructure gaps and reliability challenges that require significant investment”.
The study said that although UPI adoption is no longer urban-centric, the potential remains “far from fully realized”, with rural clusters requiring stronger merchant enablement, fraud mitigation, and bandwidth optimisation. “Sustaining this momentum will demand targeted investments in digital infrastructure, feature awareness, and security frameworks to ensure scalability and trust,” it said, calling for the introduction of “tiered cashback programs” for RuPay transactions in Tier 2–6 cities.
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“In essence, India’s digital payment ecosystem is at an inflection point – high growth achieved, but vast untapped potential requiring focused capital and policy support,” the report said.
Some of the report’s other recommendations include addressing grievances in a time-bound manner, bundling RuPay with Pradhan Mantri Jan Dhan Yojana benefits and government subsidy disbursements, and exploring cost-sharing and recovery models for sustainability of ecosystem players, among others.
“Long-term success demands a balanced, sustainable model that supports all ecosystem players. Cost-sharing frameworks for QR deployment and PoS (point-of-sale) expansion can reduce onboarding barriers for small merchants. Policy interventions should incentivise acquirers and fintechs while promoting interoperability and competition,” the report said.
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