Telangana Leads India in UPI Usage Intensity: RBI Study

Telangana has emerged as the leader in UPI transaction intensity among Indian states, according to a new study published in the Reserve Bank of India’s (RBI) September 2025 bulletin. Using PhonePe transaction data as a proxy for Unified Payments Interface (UPI) usage, the study highlights the growing shift towards digital payments, especially in southern and western India.

Southern States Dominate UPI Intensity

Alongside Telangana, the states of Karnataka, Andhra Pradesh, Maharashtra, and the National Capital Territory of Delhi also reported high per capita UPI usage. The study attributes this to,

• The presence of urban centers and economic hubs
• High employment-driven migration
• Widespread smartphone and internet penetration

These factors have created fertile ground for the expansion of UPI-based transactions, particularly in peer-to-merchant (P2M) segments for daily, low-value payments.

Key Trends in UPI Growth

1. Decline in Cash Demand

• The increasing popularity of UPI has led to a steady fall in ATM cash withdrawals as a percentage of GDP, suggesting a structural shift in consumer payment behavior.

2. Rising P2M Transactions

• The share of peer-to-merchant payments is rising steadily, with most UPI transactions now used for everyday purchases under ₹500.
• This indicates deep penetration of UPI among small businesses and informal vendors.

3. Decreasing ‘Ticket Size’

• The average value per UPI transaction (ticket size) has been declining, reinforcing the platform’s use for frequent, low-value transactions.

Static Facts

• Top UPI Intensity State: Telangana
• Other High UPI States: Karnataka, Andhra Pradesh, Delhi, Maharashtra
• Main Data Source: PhonePe (58% volume, 53% value of UPI)
• Study Published In: RBI Bulletin, September 2025
• Primary Trend: High peer-to-merchant (P2M) transaction growth