Cashing in! UPI transactions soar as Keralas digital aspirations take flight
KOCHI: Its a digi-tell all! In a clear pivot from cash, Kerala is increasingly taking to the Unified Payments Interface (UPI). National Payments Corporation of India (NPCI) figures reveal that 444.9 million UPI transactions were processed in the state in November, marking a 29.6% year-on-year increase. The value of these transactions rose 28.6% to `59,793 crore. Per capita usage climbed to 12.7 transactions a month, up from 9.8 a year earlier, indicating not just wider adoption but also more frequent use. Over the past three years, rising merchant acceptance, expanding smartphone penetration and a sustained, state-supported push towards cashless behaviour have together reshaped everyday money interactions in Kerala. The states performance mirrors a broader national surge. An NPCI-Boston Consulting Group (BCG) report released at the Global Fintech Festival 2025 highlights the scale of UPIs expansion across India. As of August, the country had 504 million unique UPI users nearly half of the adult population and close to 65 million merchants accepting UPI payments. UPI now accounts for 84% of all digital retail payments, with monthly transaction run rates 34% higher than a year ago. Within this nationwide expansion, Kerala contributes around 4% of Indias total UPI transaction volumes, placing it between ninth and eleventh nationally, depending on the month. Larger states such as Maharashtra, Karnataka, Uttar Pradesh and Tamil Nadu continue to dominate the top tier with double-digit share of the pie. In several pockets, UPI is already the default mode. In others, adoption is rising sharply, said Indraneel Ajitkumar Pandit, executive vice-president and chief digital officer, Federal Bank. Kerala stands out for its exceptional engagement among senior citizens, with digital literacy among the elderly reaching near-universal levels through systematic campaigns, he added. UPI-first state ESAF Small Finance Bank executive director George K John described Kerala as a true UPI-first state, citing women-led digital participation through Kudumbashree networks, senior-citizen digital literacy initiatives and near-universal merchant QR code adoption as defining features. In urban centres such as Kochi, Thiruvananthapuram, Kozhikode and Thrissur, UPI penetration is close to universal, especially for small-ticket payments across retail, transport, healthcare, hospitality and education. Merchant acceptance is extremely high, with even micro-merchants routinely using QR codes, he pointed out. According to Madhavankutty G, chief economist, Canara Bank, Keralas broader socio-economic profile also plays a role. It is a state with a high degree of consumerism. Banking penetration is very high, implying the number of bank accounts per capita is well above the national average, he said. High levels of urbanisation and internet penetration further support digital payments, while the large migrant workforce using UPI to send money to home states adds to transaction volumes, he added. Indraneel also pointed to the growing link between digital payments and credit growth. Studies show that business loan growth has a strong correlation with UPI adoption. Districts recording over 100% UPI growth reported a 4.2 times higher CAGR in business loans, he said. EMI collections and debt repayments through UPI have doubled over the past two years, underlining the rise of high-value and recurring transactions on the platform.
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