UPI spending on online marketplaces has grown the fastest from April to July this year, outpacing all other retail segments, as more consumers moved to digital platforms.
Spending via India’s Unified Payments Interface (UPI) on online marketplaces climbed to Rs 8,053.72 crore in July from Rs 5,170.52 crore in April, clocking a 55.76% increase, according to data from National Payments Corporation of India (NPCI).
In July, a chunk of payments—about Rs 3.48 lakh crore—went to merchants categorised as ‘Others’, who could not be identified, making it the largest segment by value. This was followed by debt collection agencies, who clocked high credit repayment via UPI, thanks to the large ticket sizes. Groceries and supermarkets came in next in value terms.
Grocery payments via UPI rose 8% to Rs 64,881.98 crore in July from Rs 60,073.81 crore in April. Debt repayments climbed 16.18% to Rs 93,857.47 crore over the same period.
According to Rishabh Goel, Co-founder & CEO, Credgenics, which helps customers and banks repay/collect loans, debt collection has become the largest segment by value because of the increasing shift towards UPI-based collections.
“The real game-changer in debt repayments is UPI’s instant, low-cost, user-friendly platform replacing legacy methods, enabling 24/7 repayments via apps and QR codes. This has reduced friction and improved compliance by 20–30% in our experience,” Goel told YourStory.
.thumbnailWrapper{
width:6.62rem !important;
}
.alsoReadTitleImage{
min-width: 81px !important;
min-height: 81px !important;
}
.alsoReadMainTitleText{
font-size: 14px !important;
line-height: 20px !important;
}
.alsoReadHeadText{
font-size: 24px !important;
line-height: 20px !important;
}
}
In contrast, UPI spending at department stores fell 4.91%, from April to July, to Rs 4,095.40 crore, while family clothing shops saw a sharper 13.31% drop to Rs 4,225.63 crore. UPI spending at men’s and women’s clothing stores grew 4.56% to Rs 10,874.31 crore.
Among other high-transaction categories, service station payments via UPI increased 3.74% to Rs 35,188.88 crore, utilities rose 30.10% to Rs 23,497.63 crore, and telecom payments advanced 11.93% to Rs 21,628.80 crore. UPI spending at eateries and restaurants grew 5.40% to Rs 18,212.77 crore, while fast-food outlets recorded a 4.87% gain to Rs 13,794.22 crore.
Digital games, which faced heightened scrutiny from the government, saw spending via UPI dip by 4.31% to Rs 10,076.56 crore from Rs 10,530.66 crore in April.
In March this year, the Tamil Nadu government rolled out rules for online gaming, including a midnight-to-5 am curfew and Aadhaar-based authentication, sparking industry concerns over feasibility, revenue loss, and potential user migration to offshore platforms.
Other categories
Electronics shops saw an 8.77% drop in UPI payments at Rs 10,067.66 crore.
Government services not elsewhere classified rose 26.49% to Rs 11,298.32 crore, while liquor store purchases increased 26.46% to Rs 5,920.43 crore.
Other categories posted modest growth. Dairies were up 0.42% to Rs 4,372.84 crore, and bakeries up 6.73% to Rs 3,778.91 crore. Variety stores fell 8.41% to Rs 3,146.05 crore. Taxi and limousine services were up 1.10% to Rs 1,186.07 crore, and digital gold purchases gained 4.29% to Rs 1,020.24 crore.
Amid the growing popularity of UPI on online marketplaces, another development is unfolding on ground.
Karnataka’s Commercial Tax Department has issued GST demand notices to traders with over Rs 40 lakh in annual UPI receipts, prompting some shopkeepers in Bengaluru to remove QR codes and push for cash payments.
Edited by Swetha Kannan
