Karnataka, Andhra Pradesh, Delhi and Maharashtra also recorded high UPI usage intensity.
| Photo Credit: ALLEN EGENUSE J
The usage intensity of Unified Payments Interface (UPI) transactions — measured in per capita volume terms — is highest in Telangana among all the States, according to a recent paper published in the Reserve Bank of India’s bulletin. The study used PhonePe transaction data as a proxy to assess UPI intensity. Karnataka, Andhra Pradesh, Delhi and Maharashtra also recorded high UPI usage intensity.
The rise of UPI is likely a major factor driving the decline in cash demand in the economy, the paper notes. This shift is evident in the steady fall in ATM cash withdrawals as a percentage of GDP (Chart 1).
The growing use of UPI for low-value, everyday transactions is reflected in the rising share of peer-to-merchant (P2M) payments, while the average value of a single UPI transaction — or the ‘ticket size’ — has been declining over time (Chart 2).
The bulk of peer-to-merchant (P2M) transactions by volume fall within the sub-₹500 value range (Chart 3).
The RBI paper used data from PhonePe — a payment service that accounts for 58% of total UPI transaction volume (Chart 4) and 53% of the total transaction value (Chart 5).
Chart 4
Chart 5
As noted earlier, UPI usage intensity is highest in several southern and western States, and in Delhi. The paper attributes this to the presence of urban centres, economic hubs, and high levels of employment-driven migration in these regions.
Cash withdrawal intensity remains higher in many northeastern States, as well as in Kerala and Goa. Delhi features on this list too. According to the paper, this could be due to factors such as tourism and service-led cash usage, remittance inflows, the continued cash dependence of rural areas, and limited digital infrastructure.
Charts source: Article titled ‘Impact of UPI on Cash Demand – Evidence from National and Subnational Levels’ by Sakshi Awasthy and Subrat Kumar Seet, published in the Reserve Bank of India’s September 2025 bulletin.
Data source: RBI, National Payments Corporation of India and the National Statistics Office
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Published – October 14, 2025 08:00 am IST