The new cashless diet: Groceries feed UPI’s growth as investments and lending go on a slowdown

Groceries and supermarkets have emerged as the biggest gainers in UPI transactions, with their share rising to 24.6% in August 2025 from 22.4% a year ago, while payments for securities trading and debt collection declined, reported TOI on Monday.

The growth in groceries was led by quick commerce platforms, where UPI has become the preferred payment option. Their share of transaction value also increased from 8.3% to 9.4%, highlighting UPI’s expanding role in everyday household spending.

Restaurants and eating outlets also recorded strong growth, with transaction volumes up nearly 35% year-on-year. Combined with fast-food outlets, they accounted for around one-fifth of UPI transactions by number, reinforcing UPI’s dominance in small-ticket discretionary spending. Pharmacies maintained a 2.5% share but grew nearly 38% in absolute volume, supported by wider adoption of online medicine delivery services.
Overall, UPI volumes in August 2025 rose 36% year-on-year to 12.7 billion transactions, while payment value increased 26% to Rs 7.24 lakh crore. Faster growth in volumes compared with value points to smaller average transaction sizes, as consumers increasingly use UPI for daily purchases.

Securities brokers saw their value share drop from 10.2% in August 2024 to 6.3% in August 2025, with UPI payments falling from Rs 58,000 crore to Rs 46,000 crore. TOI noted that regulatory changes mandating block-and-release for secondary market trades and restricting UPI in F&O transactions contributed to the decline.

Debt collection agencies continued to rank among top categories by value, collecting Rs 77,000 crore compared with Rs 69,000 crore a year ago. However, their share fell to 10.6% from 12% amid a slowdown in digital lending. Telecom payments also slipped from 8.5% to 6.8% of volumes as recharge growth plateaued.Fuel stations edged up slightly, with their UPI value share rising from 4.5% to 4.8%, supported by steady mobility demand. Meanwhile, the “others” category expanded to 42.7% from 39%, reflecting UPI’s growing adoption across varied and uncategorised merchant segments.According to TOI, the data suggests that UPI’s next phase of growth is being driven by everyday spending on groceries, food, and medicines, while investment-linked payments and lending collections adjust to regulatory and market changes.

(With inputs from TOI)