1Assistant Professor, Vivekananda Institute of Professional Studies-Technical Campus, Delhi
2Professor and Dean, Faculty of Management, South Asian University, Delhi
The study investigates the impact of the Unified Payments Interface (UPI) on traditional card-based payment systems in India, specifically in the context of point-of-sale (PoS) transactions. It aims to determine whether UPI functions as a disruptive substitute or a complementary mechanism to debit and credit card usage.
The analysis uses monthly transaction data from May 2021 to March 2025, sourced from the National Payments Corporation of India (NPCI) and the Reserve Bank of India (RBI). Regression and correlation analyses are applied to examine the relationship between UPI transaction volume/value and card usage trends.
The results show a statistically significant negative relationship between UPI growth and debit card PoS transactions, indicating substitution. Conversely, credit card usage demonstrates a positive correlation with UPI adoption, suggesting a complementary or non-competing relationship. These findings reveal a bifurcation in consumer payment behaviour and highlight the evolving dynamics of India’s retail payment landscape.
The findings have key implications for banks, FinTech firms, payment service providers (PSPs), and regulators. Banks may need to reassess the viability of traditional card systems as UPI increasingly substitutes debit card usage. FinTech’s and PSPs can explore integrating credit features into UPI-based platforms to unlock new revenue streams. The observed complementarity with credit cards opens pathways for innovations such as UPI-linked credit and “buy now, pay later” models.
UPI, Retail Payments, PoS transactions, Digital Payment Adoption, Debit Card, Credit Card, D12, E42, G21, L81, L86, O33
