Consumer confidence fuels record-breaking transaction volumes across India

India’s financial landscape witnessed a significant milestone as digital payments soared to their highest levels of the fiscal year this past December. This surge reflects a robust return of consumer confidence, largely attributed to the GST rate rationalization implemented earlier in the year. While various payment methods showed varied results, the overall trend points toward an increasingly cashless economy.

UPI and FASTag Lead the Charge

The Unified Payments Interface (UPI) and FASTag emerged as the primary drivers of this growth. Both platforms recorded their highest-ever transaction volumes and values in December. This momentum suggests that the convenience of mobile payments is becoming the preferred choice for daily transactions. Similarly, high-value business payment modes like NEFT, RTGS, and NACH also hit record benchmarks, indicating a healthy flow of capital in the corporate sector for salaries and large purchases.

Shifting Trends in Card Usage

Interestingly, credit and debit card transactions did not follow the same upward trajectory. Card spending saw a 15-20% decline compared to the peak recorded in September. Industry experts point out that card usage is heavily tied to major e-commerce sales events, which typically occur earlier in the autumn. Furthermore, the rising popularity of UPI is gradually eating into the market share traditionally held by plastic money. While customers still prefer IMPS for high-value transfers, UPI has become the undisputed king of low-value, everyday retail spending.

Impact of GST and Economic Growth

The record-breaking numbers in December even surpassed those of the October festive season. This is particularly notable because consumer spending seemed conservative during the initial announcement of GST cuts by Prime Minister Narendra Modi in August. However, once the rate cuts were fully integrated into the market by late September, spending habits shifted.

Comparing the data year-on-year, December 2025 figures are approximately 10% higher than those from December 2024. This growth aligns closely with the national nominal GDP increase of 9%. For residents in regions like Odisha, where digital Odisha initiatives are expanding, these trends highlight a broader national shift toward transparent and efficient financial ecosystems.