UPI transactions hit ₹31.53 lakh crore in October, up 16% on festive surge
Synopsis
India's UPI crossed ₹31.53 lakh crore in transaction value in October — a 16% annual jump powered by festive spending — even as the NPCI quietly deferred a new merchant fee framework past Diwali. With 822 million transactions processed daily and an MDR decision looming, October's numbers may represent the last full month of zero-fee UPI for some merchant categories.
Key Takeaways
UPI transaction value rose 16% year-on-year to ₹31.53 lakh crore in October 2026 .
Transaction volumes grew 23% to 25.47 billion , averaging 822 million transactions daily .
IMPS transaction value hit ₹7.63 lakh crore in October, up 19% year-on-year .
The NPCI deferred the new MDR framework beyond the festive season; it was originally set to launch on 15 October .
Only around 4% of merchant transactions will fall under the MDR framework; over 95% of P2M transactions remain exempt.
The Unified Payments Interface (UPI) recorded a 16% year-on-year jump in transaction value to ₹31.53 lakh crore in October 2026, while transaction volumes rose 23% to 25.47 billion, according to data released by the National Payments Corporation of India (NPCI) on 1 November. The robust numbers coincide with the festive season, a period traditionally marked by elevated consumer spending and digital payment activity across India.
Key Transaction Figures
On a daily average basis, UPI processed approximately 822 million transactions in October, with the average daily transaction value standing at roughly ₹1,01,707 crore. These figures build on a strong September, when UPI volume grew 23% year-on-year to 24.07 billion transactions and value rose 18% to ₹29.37 lakh crore. The month-on-month uptick signals that the festive season drove incremental volume beyond the already-elevated year-round baseline.
IMPS Also Sees Sharp Growth
Beyond UPI, the Immediate Payment Service (IMPS) instant fund transfer segment recorded a transaction value of ₹7.63 lakh crore in October, marking a 19% year-on-year increase, the NPCI data showed. Average daily IMPS transaction counts stood at 12.10 million, with an average daily transaction amount of ₹24,601 crore.
MDR Rollout Deferred Past Diwali
A significant regulatory development underlies these numbers: the NPCI deferred the implementation of a new Merchant Discount Rate (MDR) framework on select UPI merchant transactions, pushing it beyond the festive season. The framework had originally been scheduled to take effect from 15 October, but the NPCI's UPI and Services Steering Committee decided to postpone the rollout with the festive season in mind. A revised implementation date is yet to be communicated.
Under the proposed MDR structure, select merchant categories — including railways, telecom services, insurance, and fuel purchases — would attract a flat MDR of ₹5 on UPI transactions exceeding ₹2,000. For large merchants above the same threshold, a charge of 0.4% would apply, subject to a maximum cap of ₹300 per transaction.
How Much of UPI Will Be Affected by MDR
The NPCI has maintained that the revised MDR structure will have a limited impact on the broader UPI ecosystem. According to estimates shared earlier, only around 4% of merchant transactions are expected to fall under the new framework, while over 95% of person-to-merchant (P2M) UPI transactions will continue to remain exempt from MDR charges. This framing is intended to address concerns that introducing any fees could dampen adoption, particularly among smaller merchants and rural users. Notably, India's UPI has set successive monthly records through 2026, reinforcing its position as one of the world's largest real-time payments networks. With the MDR decision still pending final implementation, the coming months will test whether fee introduction at even a narrow scale affects transaction trajectory.
Point of View
But the context matters: the NPCI deferred the MDR framework specifically to avoid a festive-season backlash, meaning the clean headline growth figure is partly a policy artefact. The more revealing test will come in the first month after MDR goes live — does volume hold steady, or do large-merchant P2M transactions migrate back to cash or card? India has built one of the world's most-used real-time payment rails on a zero-fee model; even a narrow, well-capped MDR is a philosophical departure. The NPCI's own estimate that only 4% of transactions are affected is reassuring, but it was also the body that quietly moved the launch date twice — the credibility of that figure will be tested in execution.
NationPress
1 Nov 2026
Frequently Asked Questions
What were UPI's transaction figures for October 2026?
UPI recorded a transaction value of ₹31.53 lakh crore in October 2026, a 16% increase year-on-year, while transaction volumes rose 23% to 25.47 billion. On a daily average, UPI processed around 822 million transactions worth approximately ₹1,01,707 crore.
Why did UPI transactions surge in October 2026?
The spike is largely attributed to the festive season, which includes Diwali and related celebrations that historically drive a significant uptick in consumer spending and digital payments. The deferral of the new MDR fee framework also meant merchants and consumers transacted without any additional charges during this period.
What is the UPI Merchant Discount Rate (MDR) and why was it deferred?
The MDR is a proposed fee framework under which select merchant categories — including railways, telecom, insurance, and fuel — would be charged a flat ₹5 on UPI transactions above ₹2,000, while large merchants would pay 0.4% capped at ₹300 per transaction. The NPCI deferred its original 15 October launch date to avoid disruption during the festive season, with a revised date yet to be announced.
How many UPI transactions will be affected by the MDR charges?
According to the NPCI, only around 4% of merchant transactions are expected to fall under the new MDR framework. Over 95% of person-to-merchant (P2M) UPI transactions will remain exempt from any charges.
How did IMPS perform in October 2026?
The Immediate Payment Service (IMPS) recorded a transaction value of ₹7.63 lakh crore in October, up 19% year-on-year. Average daily transaction counts stood at 12.10 million, with an average daily amount of ₹24,601 crore.
