Diwali spending: UPI tops Rs 1 lakh Cr on Dhanteras, cards left behind

Indians transferred over six lakh crore rupees through UPI during this year's Diwali week, cementing the homegrown digital payment system's dominance over credit and debit.

Dhanteras—the auspicious day when Indians traditionally purchase gold and other valuables—emerged as the undisputed peak of the spending surge. UPI transactions topped Rs 1 lakh crore on Dhanteras.

Compared with last year’s Diwali week in late October 2024, total UPI spending jumped more than 13%, while transaction volumes climbed nearly 28%. On Dhanteras itself, year-on-year value growth was 17.5%, with volumes up by a third.

Traditional cards told a starkly different story. Combined credit and debit card spending totalled Rs 44,691 crore during the festival week, down more than 5% from Rs 47,164 crore last year.

The decline cut across channels—physical store transactions fell 4% to Rs 21,575 crore, while ecommerce card spending dropped over 6% to Rs 23,116 crore.

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The shift underscores how deeply UPI has penetrated Indian consumer behaviour. What began as a pandemic convenience has evolved into the dominant payment rail, with its instant, free transfers.

UPI now accounts for about 85% of all digital payment transactions in India, processing roughly twenty billion transactions monthly worth over $280 billion, according to RBI Governor Sanjay Malhotra.

Non-metro cities drove this year's online shopping boom, accounting for nearly three-quarters of total ecommerce volume.

Tier III cities alone contributed over 50% of all orders, according to logistics platform ClickPost's analysis of 4.25 crore shipments. Food delivery platforms reported doubling their order volumes, with vegetarian and thali orders jumping 40% during Navratri.

The government's GST reforms, which slashed rates on 375 items from toothpaste to cars just before Diwali, also helped buoy spending this year.