NEW DELHI, July 11: India has emerged as the global leader in fast payments, thanks to the widespread adoption of the Unified Payments Interface (UPI), according to a recent note by the International Monetary Fund (IMF). The IMF report titled ‘Growing Retail Digital Payments: The Value of Interoperability’ highlights the transformative impact of UPI on India’s digital payments landscape.

Launched in 2016, UPI has rapidly scaled up to process over 18 billion transactions each month, overtaking other forms of electronic retail payments in India. Built over the Immediate Payment Service (IMPS) infrastructure, UPI provides instant, interoperable payment capabilities, allowing users across different platforms to transact seamlessly.

The IMF note emphasises that interoperability has been a critical driver in enhancing user experience and increasing digital payment adoption. “Interoperability directly increases users’ freedom to choose their favourite app, enabling them to take full advantage of the variety and quality of apps available,” it said. The ability of multiple apps to work across platforms not only improves usability but also encourages innovation and competition among payment providers.

UPI’s exponential growth has also triggered a decline in traditional cash usage, marking a significant shift in India’s financial behaviour. The IMF believes that by enabling interoperability, the Indian model provides a replicable blueprint for other countries aiming to reduce cash dependency and foster inclusive digital economies.

The report also credits the National Payments Corporation of India (NPCI) for launching the Bharat Interface for Money (BHIM) app in 2016, which catalyzed early adoption of UPI. Initially accounting for over half of the payer-side transaction value, BHIM paved the way for private fintech players to enter the ecosystem, reinforcing the catalytic role of public-sector participation in building digital infrastructure.

The IMF further highlights that public-sector involvement can help overcome the “coordination failure” often seen in emerging markets, where low user adoption discourages app development and vice versa. India’s experience, it notes, shows how strategic intervention can kick-start a thriving digital ecosystem.

UPI’s performance continues to impress, with June 2025 figures showing a 32% year-on-year growth in transaction volume and a 20% rise in transaction value. Daily transactions rose from 602 million in May to 613 million in June, underscoring India’s leading position in the global digital payments landscape.