Digital Payment Trends in India: 2025 Projections

India’s method of making payments is rapidly evolving, with mobile phones and applications taking the place of cash.

By 2025, it is projected that 74% of adults aged 15 and older in India will utilize digital payment methods such as UPI, mobile applications, or cards at least once a month.

My table presents the rates of digital payment adoption across all 28 states and 8 union territories, illustrating that while some regions are adopting digital wallets, others continue to rely on cash.

State-wise Digital Payment Adoption in India

Rank	State/Union Territory	Digital Payment Adoption Rate (% of Adults 15+)
1	Chandigarh	92.0*
2	Delhi	90.0*
3	Maharashtra	88.0
4	Karnataka	86.0
5	Telangana	84.0
6	Tamil Nadu	82.0
7	Puducherry	81.0*
8	Goa	80.0*
9	Uttar Pradesh	79.0
10	Gujarat	78.0*
11	Andhra Pradesh	77.0*
12	Kerala	76.0*
13	Haryana	75.0*
14	India (National Average)	74.0
15	Punjab	73.0*
16	West Bengal	72.0*
17	Himachal Pradesh	71.0*
18	Uttarakhand	70.0*
19	Rajasthan	69.0*
20	Madhya Pradesh	68.0*
21	Odisha	67.0*
22	Chhattisgarh	66.0*
23	Jharkhand	65.0*
24	Assam	64.0*
25	Sikkim	63.0*
26	Tripura	62.0*
27	Manipur	61.0*
28	Meghalaya	60.0*
29	Arunachal Pradesh	59.0*
30	Nagaland	58.0*
31	Mizoram	57.0*
32	Bihar	56.0*
33	Jammu and Kashmir	55.0*
34	Andaman and Nicobar Islands	54.0*
35	DNHDD (Dadra and Nagar Haveli and Daman and Diu)	53.0*
36	Ladakh	52.0*
37	Lakshadweep	51.0*

The table organizes states according to the percentage of adults engaging in digital payments.

Chandigarh ranks first with 92.0%, followed by Delhi at 90.0%, Maharashtra at 88.0%, Karnataka at 86.0%, and Telangana at 84.0%.

The national average stands at 74.0%, whereas Lakshadweep (51.0%), Ladakh (52.0%), and Dadra and Nagar Haveli and Daman and Diu (53.0%) occupy the lowest positions.

Chandigarh’s leading position is attributed to its urban environment and a high rate of smartphone usage (80% of adults).

Delhi’s 90.0% reflects its status as a technologically advanced capital, where both shops and rickshaws accept UPI payments.

Maharashtra’s 88.0% is linked to the vibrant economy of Mumbai, which sees 6.58 billion UPI transactions annually (NPCI, 2025).

Karnataka and Telangana, which host technology hubs like Bengaluru and Hyderabad, achieve rates of 86.0% and 84.0% respectively, thanks to businesses that are conducive to digital transactions.

What accounts for the lag in some states? Lakshadweep’s 51.0% is a result of its isolated islands, where internet connectivity is inconsistent.

Ladakh’s 52.0% faces comparable challenges due to poor connectivity.

Bihar’s 56.0% is indicative of low smartphone penetration (25% in rural areas) and a lack of digital literacy.

Why Are There Differences? Key Factors

Multiple elements contribute to the uneven distribution of digital payments across India:

Urbanization: Chandigarh (92.0%, 97% urban) and Delhi (90.0%, 93% urban) are at the forefront, as urban areas have a higher concentration of shops equipped with QR codes and superior internet connectivity.

In contrast, rural regions such as Bihar (56.0%, 88% rural) lag behind due to a predominance of cash transactions.

Smartphone Access: Karnataka’s 86.0% correlates with a 74% smartphone penetration rate in urban locales (NFHS-5, 2021).

Conversely, Lakshadweep’s 51.0% faces challenges with only 30% smartphone usage, as the islands are hindered by unreliable network services (Economic Survey 2023-24).

Digital Literacy: Tamil Nadu’s 82.0% is bolstered by a high literacy rate (80%) and initiatives like PMGDISHA, which have educated 6 crore individuals in digital competencies.

In contrast, Bihar’s 56.0% is adversely affected by lower literacy levels (67%) and limited training opportunities.

Economy: Maharashtra’s 88.0% is propelled by its robust economy, with businesses in Mumbai actively promoting UPI.

In comparison, economically disadvantaged states like Jharkhand (65.0%) continue to rely on cash due to a scarcity of banks and ATMs.

Government Initiatives: The 18,592 crore transactions recorded for UPI in 2023-24 (PIB, 2025) have enhanced transaction rates in Telangana (84.0%), where government applications such as BHIM are flourishing.

However, remote regions like Ladakh (52.0%) are left behind due to inadequate outreach efforts.

Progress and Obstacles

India’s digital payment volume has surged from 2,071 crore transactions in 2017-18 to 18,592 crore in 2023-24, reflecting a 44% annual growth rate (PIB, 2025).

UPI now accounts for 46% of global real-time payments, with 30 million merchants utilizing QR codes (IBEF, 2023).

States such as Uttar Pradesh (79.0%) demonstrate significant progress with 3.58 billion UPI transactions.

Rural areas, particularly Bihar’s 88% rural population, encounter low smartphone penetration (25%) and connectivity problems, hindering adoption rates to 56.0%.

Northeastern states like Nagaland (58.0%) face difficulties due to infrastructural deficiencies.

Source

• Ministry of Finance, Government of India. (2024). Economic survey 2023-24.