Implications of COVID-19 on Digital Payment Services in India: Growth, Trends and Future Prospects

Abstract: Digital payment allows a monetary transaction to be completed between two or more parties on an online platform, without the physical exchange of currency, at any hour and from any location. This paper examines the implications of the COVID-19 pandemic for digital payment services in India and the trajectory of growth that followed. The study is based on secondary data drawn from the Reserve Bank of India, the National Payments Corporation of India, the Ministry of Electronics and Information Technology and published research. It finds that the total volume of digital payment transactions rose from 20.71 billion in FY 2017-18 to 222.6 billion in FY 2024-25, that the Unified Payments Interface accounted for 83.4 per cent of ecosystem volume by FY 2024-25, and that the pandemic acted as a decisive accelerant by making contactless payment a matter of public health rather than convenience. Cyber-security risk, the rural-urban infrastructure divide and limited digital literacy remain the principal constraints on equitable adoption.

Keywords: Digital payment services, COVID-19, Unified Payments Interface, contactless payment, financial inclusion, fintech, Digital India.