Unlocking India’s digital commerce potential: UPI’s transformative role

The digital economy is reshaping how businesses connect with consumers globally. India is at the forefront of this transformation, poised to experience the highest growth in consumer spending among emerging markets over the next decade. In India and Southeast Asia, consumer spending will surge by 122% between 2024 and 2034, outpacing the rates of entire regions like Africa (103%) and Latin America (57%), according to projections from the World Data Lab in Beyond Borders 2025, EBANX's annual study.

This rapid expansion comes with a unique demographic shift. While other emerging markets will see a continuation of existing spending patterns, India and Southeast Asia will experience an ageing process within their consumer class. By 2034, the 45-65 age group will drive spending and transactions, a stark contrast from today's dominant 15-30 age group. This evolution signals a shift in purchasing behaviours and payment preferences, reinforcing the need for seamless, secure, and flexible digital payment solutions that cater to a more financially mature and tech-savvy audience.

A projected 14% increase in e-commerce transactions across emerging Asian countries is a significant factor driving the rise in consumer spending. According to Statista's data in Beyond Borders, India is at the helm of this growth, leading digital commerce in the region.

EBANX is committed to facilitating cross-border commerce in this rapidly evolving market by bridging Indian companies with consumers in emerging countries across Latin America and Africa and opening doors for Indian consumers to connect with businesses from around the globe. We recognize that a key aspect of this commitment lies in offering a range of convenient payment options in India, the country's most preferred payment method for online purchases.

The rise of UPI: A dominant force in digital payments

UPI has rapidly become the most popular payment method for digital commerce in India, capturing a staggering 55% share of the volume transacted online and growing at 18% annually, according to data from Payments and Commerce Market Intelligence (PCMI) in Beyond Borders. 

By 2027, transactions in online commerce through UPI will exceed USD 150 billion. This dominance is particularly evident in key digital sectors, with 75% of streaming service transactions, 62% of digital service purchases, 60% of travel bookings, and 56% of online retail sales being conducted via UPI.

As India continues its transition from a cash-heavy economy to a digital-first one, the role of UPI in financial inclusion and e-commerce expansion cannot be overstated. It has become a popular payment method for daily purchases in India, and its ubiquity means that it is a no-brainer for cross-border commerce. UPI's convenience and 24/7 availability further solidify its importance as a payment option for Indian customers.

Despite all the potential of UPI, for international merchants looking to tap into this market, integrating the payment method into cross-border transactions has historically been complex – until now.  

Bridging the gap: Enabling recurring UPI payments for global businesses

For international businesses looking to expand to India, especially in streaming, SaaS, and online education industries, recurring payments are a critical business need. For so long, the only option for a global merchant to offer recurring payments was via international cards – and they could not plug into UPI Autopay – the recurring product stack from UPI. 

Recognizing this need, EBANX is already processing recurring UPI payments for cross-border transactions, ensuring a frictionless experience for both merchants and consumers. This is a game-changer for businesses looking to enter the Indian market, as it removes barriers to subscription-based models, which are increasingly popular among Indian consumers. In addition, it helps international merchants expand their target population – beyond the people who own international cards.

Our global expertise in instant payment systems, including our experience with Brazil's Pix – the world's fastest-growing digital payment method in emerging markets –has equipped us with deep insights into scaling real-time payments across diverse markets. 

Similar to UPI, Pix transformed Brazil's digital economy by providing instant, seamless transactions. EBANX's role in Pix's adoption now positions us uniquely to leverage that knowledge in India, ensuring that global businesses can efficiently navigate this evolving payments landscape.
 

India's digital payment boom: Opportunities and challenges

Beyond UPI, India's digital commerce ecosystem is expanding rapidly. By 2027, India's digital commerce market is expected to surpass USD 274 billion, making it one of the most lucrative opportunities for global merchants, per PCMI data featured in EBANX's study. 

However, challenges remain. Despite the remarkable growth in the cards market, reaching 993 million debit cards issued and 107 million credit cards as of 2024 (World Bank), credit card penetration in India is still relatively low, with only 20% of the population having access to it. 

This demonstrates the importance of alternative payment methods in India's landscape, like UPI and cash-based solutions, and a combination of these methods with the cards available in the country.

Additionally, EBANX's study revealed that mobile-based payments are outpacing desktop transactions in India, with mobile payments projected to grow by 34% over the next two years, compared to just 12% for desktop-based payments. This shift underscores the importance of mobile-first payment solutions and frictionless integration for merchants looking to scale in India.

Expanding India's role in global commerce

While much of the focus has been on international businesses entering India, EBANX is equally committed to empowering Indian companies to expand into global markets. Our expertise in emerging economies across Latin America and Africa enables us to provide Indian merchants with the tools to reach new customer bases and navigate the complexities of cross-border transactions.

By facilitating payments into and out of India, we ensure local and global businesses can capitalize on India's booming digital economy. This dual approach sets us apart, aligning with India's increasing role in international commerce, digital services, and cross-border trade.