How Are GST Reforms and Festive Season Influencing UPI Payments?
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Synopsis
The festive season has ignited a remarkable increase in UPI payments, reaching Rs 17.8 lakh crore this year. Coupled with GST reforms, this surge indicates a bright future for consumer spending. Discover the impact and trends shaping the digital payment landscape in India.
Key Takeaways
- UPI payments surged to Rs 17.8 lakh crore during the festive season.
- GST reforms are expected to enhance consumer spending by Rs 20 lakh crore.
- Debit card usage increased significantly, reaching Rs 65,395 crore.
- Digital retail payments are on the rise, indicating a recovery in consumption.
- Growth in spending is evident across various sectors.
New Delhi, Oct 31 (NationPress) During the festive season, spending through the Unified Payments Interface (UPI) surged to Rs 17.8 lakh crore, compared to Rs 15.1 lakh crore in the same period last year, according to a report released on Friday.
In September, UPI experienced a seasonally unadjusted month-on-month (MoM) growth of 2.6 percent in terms of value, as reported by Bank of Baroda.
There was a remarkable 31 percent year-on-year growth in transaction count, totaling 19.63 billion in September, accompanied by a 21 percent increase in transaction value reaching Rs 24.90 lakh crore, as indicated by data from the National Payments Corporation of India (NPCI). Month-over-month, UPI also demonstrated growth in transaction value, rising from Rs 24.85 lakh crore in August.
For the Dussehra-to-Diwali period, the cumulative value of UPI, debit, and credit card transactions climbed to around Rs 18.8 lakh crore, up from Rs 16.4 lakh crore the previous year.
The GST 2.0 stimulus, which coincided with the festive season, is anticipated to enhance household expenditure and has been linked to a significant uptick in digital retail payments, suggesting a resurgence in consumer activity, the report stated.
The government predicts that the GST reduction could lead to increased consumer spending by approximately Rs 20 lakh crore, as noted by the bank.
During this festive month, transactions made via debit cards totaled Rs 65,395 crore, a substantial rise from Rs 27,566 crore the previous year. Conversely, credit card usage reflected a more cautious approach during this timeframe, according to the bank.
The average transaction value during the festive period was Rs 1,052 for UPI, Rs 8,084 for debit cards, and Rs 1,932 for credit cards, as reported by Bank of Baroda.
The bank forecasts that the small to mid-value consumption segment is likely to see a boost based on these spending trends.
Merchant-level UPI data for September indicated a growth of over 50 percent in average spend per transaction across various categories, including men’s and women’s clothing, package shops, liquor outlets, online marketplaces, electronics, and beauty salons.
"We anticipate a vibrant private consumption demand in Q2, with this trend expected to continue into Q3," the bank projected.
Point of View
We recognize the transformative impact of GST reforms and the festive season on UPI payments. The data highlights a clear revival in consumer spending, indicative of a robust economy. The trends we observe are essential for understanding the future of digital transactions in our nation.
NationPress
31/10/2025
Frequently Asked Questions
What is the total UPI transaction amount during the festival season?
The total UPI transaction amount during the festival season increased to Rs 17.8 lakh crore, up from Rs 15.1 lakh crore last year.
How much did debit card usage rise during this period?
Debit card transactions rose to Rs 65,395 crore during this festive month, significantly up from Rs 27,566 crore the previous year.
What impact did GST reforms have on consumer spending?
The GST reforms are expected to boost consumer spending by approximately Rs 20 lakh crore, revitalizing household expenditure.
What growth did UPI see in September?
In September, UPI transactions recorded a 31 percent year-on-year growth in transaction count and a 21 percent increase in transaction amount.
What sectors saw increased spending during the festive season?
There was over 50 percent growth in average spending for sectors like clothing, liquor, electronics, and online marketplaces.
