UPI Turns 10: The Revolution India’s Elites Underestimated
There are some moments in India’s economic history that become more significant only with the passage of time.
The launch of the Unified Payments Interface (UPI) in 2016 was one such moment.
At the time, the idea sounded ambitious: create a system through which an ordinary Indian could transfer money instantly from one bank account to another, pay a shopkeeper without cash, and eventually make a digital payment simply by scanning a QR code.
The scepticism was considerable. Could India’s enormous population actually embrace digital payments? Could a small shopkeeper in a village use technology designed by bankers and engineers? Would people who depended almost entirely on cash suddenly trust their phones with money?
Ten years later, those questions have received an emphatic answer.
India did it. And it did it at a scale that few people in 2016 could have imagined.
UPI was piloted on April 11, 2016, with 21 member banks. It subsequently became available to the public in August 2016. The first month saw only about 90,000 transactions. By FY2025-26, annual UPI transactions had reached 24,162 crore, compared with just 1.78 crore in FY2016-17.
In July 2026 alone, UPI processed 2,366 crore transactions worth ₹29.88 lakh crore. There were 741 banks live on the platform. UPI accounted for approximately 84% of India’s digital-payment transactions in FY2025-26.
This is not incremental growth.
It is a transformation.
And it raises an uncomfortable question: how badly did India’s political and intellectual establishment underestimate the Indian commoner?
The India of 2016 was told it was not ready
The political controversy surrounding digital payments emerged most dramatically after demonetisation.
The government was attempting to push India towards a less-cash economy while the opposition repeatedly questioned whether the country’s infrastructure, citizens and small businesses were ready.
Some of the criticism came from extremely experienced politicians.
Former Finance Minister P. Chidambaram was among the strongest critics of the government’s cashless-economy push. His argument centred on the enormous gap between India’s ambitions and the infrastructure available to ordinary citizens.
Shashi Tharoor similarly questioned whether India possessed the digital infrastructure necessary to make a cashless economy work. During the parliamentary debate in February 2017, he pointed to the limited availability of card-payment infrastructure and argued that the country was attempting to build the “penthouse” before putting adequate foundations in place.
Supriya Sule raised questions about the government’s digitalisation strategy, including whether India was really moving towards a cashless economy or merely a less-cash economy, as well as concerns surrounding cybersecurity and regulation.
Taken individually, these were legitimate questions.
But history has a rather unforgiving way of testing political predictions.
And the prediction implicit in much of the scepticism was that ordinary Indians would struggle to make the transition.
They didn’t.
The great Indian commoner proved the experts wrong
The most extraordinary part of the UPI story is not the technology.
It is the user.
The technology was designed by institutions, banks, engineers and policymakers. But its ultimate success was determined by millions of ordinary Indians.
The street-food vendor accepted it.
The autorickshaw driver accepted it.
The vegetable seller accepted it.
The domestic worker accepted it.
The neighbourhood kirana store accepted it.
The college student accepted it.
The elderly parent began receiving money through it.
A person selling ₹20 worth of vegetables could display the same basic payment mechanism used by a multinational corporation.
That was the breakthrough.
The Indian consumer did not need to understand APIs, payment protocols, banking interoperability or digital public infrastructure.
They simply needed to understand one thing:
“Scan karo, payment ho jayega.”
That simplicity defeated the old assumption that sophisticated technology would necessarily remain the preserve of India’s educated and affluent classes.
In fact, UPI demonstrated something much more important about India: Indians may not adopt technology because policymakers think they should, but they will adopt it extraordinarily quickly when technology makes everyday life easier.
The government deserves credit for refusing to think small
UPI’s success also illustrates an important feature of the Modi government’s approach to digital infrastructure.
The government did not simply wait for private companies to create a payments ecosystem independently.
It backed an interoperable public digital infrastructure in which banks, fintech companies and consumers could participate.
UPI itself was developed by the National Payments Corporation of India, with the RBI and banking ecosystem playing foundational roles. The initial launch was not a private-sector product. It was an infrastructure project.
The government’s subsequent push helped create the environment in which UPI could scale.
BHIM was launched in December 2016. Dynamic QR followed in 2017. UPI 2.0 arrived in 2018. The system continued expanding into recurring payments, IPO applications, feature-phone payments and other use cases.
This is where the story becomes politically significant.
A government pursuing transformational reforms cannot always wait until everyone agrees that the reform will work.
If it had waited for universal confidence in 2016, UPI might have remained a promising banking experiment.
Instead, India built the infrastructure first.
The people then proved the infrastructure’s worth.
The “elite India versus ordinary India” lesson
Perhaps the most revealing lesson from UPI is not about opposition parties at all.
It is about a recurring tendency among India’s elite to underestimate the adaptability of ordinary Indians.
There was a time when many assumed that digital banking was fundamentally an urban phenomenon.
Then came smartphones.
There was a time when people believed that India’s small merchants would never abandon cash.
Then came QR codes.
There was a time when digital payments were considered something primarily used by educated middle-class consumers.
Then the roadside tea seller started displaying a QR code.
There was a time when India was repeatedly told that its digital infrastructure was too weak to support world-scale financial technology.
Today, the International Monetary Fund recognises UPI as the world’s largest real-time payment system by transaction volume. The Indian government’s latest data puts UPI’s FY2025-26 annual transaction volume at 24,162 crore.
The contrast is extraordinary.
In August 2016, UPI recorded only around 90,000 transactions in its first month.
In July 2026, it processed 2,366 crore transactions in one month.
That is the equivalent of moving from an experiment to a national habit.
Ten years later, the numbers settle the argument
Politics can argue endlessly about whether the original policy was necessary, whether demonetisation accelerated adoption or whether individual political leaders were right or wrong in their criticism.
Numbers are less ideological.
And the numbers are staggering.
UPI’s annual transaction volume increased from 1.78 crore in FY2016-17 to 24,162 crore in FY2025-26.
Its annual transaction value increased from just ₹0.07 lakh crore to ₹314 lakh crore.
The number of participating banks increased from 21 to 741.
Average daily transactions in 2026 reached approximately 66 crore.
The latest July 2026 record alone stands at 2,366 crore transactions worth ₹29.88 lakh crore.
Those figures cannot be explained by government propaganda.
They represent millions of voluntary decisions made every day by Indian consumers and merchants.
People use UPI because it works.
The lesson for India’s political class
The real lesson from UPI’s first decade should therefore be bigger than a BJP-versus-Congress argument.
It should be a warning to anyone who underestimates India.
India’s citizens are often described through the prism of poverty, illiteracy, inadequate infrastructure and social complexity.
Those challenges are real.
But they can obscure another reality:
India’s population is extraordinarily capable of adopting technology when the technology solves a real problem.
The roadside vendor does not need an MBA to understand UPI.
The autorickshaw driver does not need to understand fintech.
The farmer does not need to understand blockchain.
The customer simply needs a phone, a bank account and a reason to make a payment.
The Indian commoner turned out to be far more technologically adaptable than many people sitting in air-conditioned offices and Parliament had anticipated.
That is perhaps the most powerful story behind UPI.
From 90,000 transactions to 2,366 crore
UPI’s ten-year journey can therefore be reduced to two numbers.
90,000.
That was approximately the number of transactions in its first month.
And:
2,366 crore.
That was the number of transactions in July 2026 alone.
Between those two numbers lies a remarkable story of technological ambition, government persistence, institutional innovation and—above all—the willingness of ordinary Indians to embrace something new.
The critics were right about one thing: India in 2016 had enormous infrastructure challenges.
Where they were wrong was in assuming that those challenges necessarily meant India would remain incapable of changing rapidly.
The government chose to build.
The opposition questioned.
The experts worried.
And then the common Indian quietly got on with it.
Today, the same vegetable vendor who was once presumed to be too poor, too technologically inexperienced or too dependent on cash to participate in a digital economy can hold up a QR code and say:
“UPI kar do.”
That may be the simplest—and most powerful—answer to the scepticism of a decade ago.
UPI is therefore not merely a story about digital payments.
It is a story about India’s ability to surprise those who underestimate it.
And after ten years, the verdict is unmistakable:
India did not merely adopt UPI. India turned UPI into a global-scale digital payment phenomenon.
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