India's payments sector attracts $5.8 billion funding since 2021: Report
New Delhi, Aug 13
India's payments sector has attracted nearly $5.8 billion in funding across 371 disclosed equity rounds since 2021, underscoring the transformative impact of the Unified Payments Interface on the country's digital payments ecosystem, a report said on Thursday.
The report by market intelligence platform Tracxn, titled "The India Payments Landscape: How UPI Made India Self-Reliant in Payments", highlights how a public digital payments infrastructure has fostered a thriving private-sector ecosystem encompassing consumer payment apps, business payment platforms and financial technology infrastructure providers.
According to the study, consumer-focused payment platforms accounted for the largest share of investments, attracting around 53 per cent of total funding, or approximately $3.1 billion.
Business payments firms received about 38 per cent, while payment infrastructure and API-based enablers accounted for the remaining 9 per cent, equivalent to roughly $526 million.
"Payments companies have raised $5.8 billion across 371 disclosed equity rounds since January 2021, produced eight IPOs and 25 acquisitions, and begun consolidating around a handful of well-funded companies," the report said.
"The report's central finding is that a public rail that charges merchants nothing has helped seed and scale a private industry above it, even as a new law reopens the question of how the rail itself should be funded," it added.
Funding activity peaked during the technology investment boom of 2021 before slowing amid the broader funding downturn between 2022 and 2024.
The report also points to increasing maturity in the sector, with companies beginning to generate exits and recycle capital.
Since 2021, India's payments industry has witnessed eight initial public offerings and 25 acquisitions, the report stated.
The report further highlighted UPI's growing international footprint. Cross-border UPI transactions increased more than twenty-fold from around 37,000 in FY24 to over 7.5 lakh in FY25, while the payments network is now operational in more than a dozen countries.
NPCI International has expanded UPI globally through multiple models, including linking existing payment systems, building payment rails for partner countries and sharing technology standards.
— IANS
Reader Comments
The report rightly points out that UPI charges zero merchant fees, which has democratised digital payments in India. But we need to ask - how sustainable is this model? If the payments rail itself is free, eventually something will give. Hope the new law addresses this carefully without hurting small businesses or consumers.
₹5.8 billion is substantial, but the slowdown between 2022-24 is concerning. The early success was driven by a tech boom, now consolidation phase is here. The 8 IPOs and 25 acquisitions prove maturity, but we need more sustainable business models beyond just transaction volumes. Let's see how the new payment law shapes the future.
I love how UPI has become the backbone of our digital ecosystem! Even in my small town, my grandmother uses it for everything. The global expansion is icing on the cake - if India can take UPI to other countries, it's a massive soft power win. But I do worry about data privacy and the monopoly of a few big players. Need balanced regulation.
The consumer apps getting 53% of the funding makes sense - look at PhonePe, Google Pay, Paytm - they are household names. But the 9% going to infrastructure is worrying. The real innovation will come from API-based enablers and business payments, as the report notes. We need more investment there for the next level of growth.
Impressive numbers from India's payments sector. The UPI model is genuinely unique - a public infrastructure enabling private innovation at scale. The cross-border expansion to over a dozen countries is particularly noteworthy. As someone
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