India’s digital payments journey is often showcased through the extraordinary success of the Unified Payments Interface (UPI). As it nears a decade since launch, UPI processes more than 20 billion transactions a month and is used by an estimated 491 million individuals — nearly half of India’s addressable population. Yet, beneath these impressive aggregates lies a quieter but critical question: who are the millions still not using UPI, and why does this matter for the next phase of India’s digital public infrastructure?
UPI’s Scale Masks Uneven Adoption
UPI has fundamentally reshaped everyday transactions, from street vendors to salaried professionals. However, the public data available on the platform focuses largely on system-level indicators — transaction volumes, values, uptime, and technical performance. While these metrics demonstrate efficiency and scale, they say little about who is using UPI and who is not. There is almost no publicly available insight into adoption patterns across regions, income groups, age cohorts, or gender.
This absence of granular data creates a blind spot. Without understanding where non-users are concentrated or what barriers they face, policy interventions risk being broad and generic, rather than precise and effective.
Why Inclusion Now Matters More Than Growth
UPI’s early growth was driven by network effects, smartphone diffusion, and merchant adoption. The next phase, however, is about inclusion rather than expansion alone. Those still outside the system are not marginal; they represent structural gaps in access, awareness, and trust. Reaching them is essential not only for equity but also for the long-term resilience of India’s digital payments ecosystem.
A national baseline study mapping both users and non-users could help identify clusters of exclusion — whether in regions with weak connectivity, among older citizens unfamiliar with digital interfaces, or among groups without personal access to smartphones.
What Limited Evidence Tells Us So Far
One of the few studies that sheds light on non-use comes from Artha Global, which surveyed users and non-users across four districts in Maharashtra and Bihar. Although the findings are not nationally representative, they reveal an important insight: UPI non-users are not a single homogeneous group.
Instead, they fall into distinct categories, each facing different constraints and requiring different policy responses.
The Unaware: When the Platform Is Still Invisible
The first group comprises those who are simply unaware of UPI. In the Artha Global sample, about 57% of non-users had not even heard of the platform. This is striking, especially in states considered digitally mature. It suggests that awareness gaps persist despite high overall transaction volumes and that outreach efforts may not be reaching specific communities or geographies.
The Access-Constrained: Structural and Capability Barriers
The second group is aware of UPI but unable to use it due to access or capability constraints. These include lack of personal smartphone ownership, unreliable internet connectivity, or low digital confidence. Notably, these barriers are often gendered. Women are less likely to own a personal device or feel comfortable navigating digital interfaces, even when they have bank accounts.
For this group, the challenge is not persuasion but infrastructure and capability — better connectivity, affordable devices, and sustained digital literacy efforts.
The Access-Ready but Unconvinced: Trust and Usability Gaps
The third group has smartphones, internet access, and bank accounts but still chooses not to use UPI. Their reluctance stems from perceived complexity, usability concerns, or fears around fraud and security. Addressing this segment requires a different approach altogether: simplifying user experience, improving grievance redressal, and building trust through consistent consumer protection.
Why a National Baseline Study Is Crucial
Together, these categories — unaware, access-constrained, and access-ready — reveal a layered reality of exclusion. A national baseline study could map where each group is concentrated and why, enabling targeted interventions rather than one-size-fits-all solutions. It would also allow longitudinal tracking, helping policymakers assess whether inclusion efforts are actually working over time.
What to note for Prelims?
- UPI is a core component of India’s digital public infrastructure.
- Public UPI data focuses on aggregate volumes, not user demographics.
- Non-users can be grouped into unaware, access-constrained, and access-ready categories.
What to note for Mains?
- Critically analyse the limitations of aggregate data in assessing digital inclusion.
- Discuss why the next phase of UPI growth depends on targeted inclusion rather than scale alone.
- Examine how gender, access to devices, and trust deficits shape digital payment adoption.
UPI’s long-term success will not be defined only by rising transaction counts, but by how effectively it brings in those still excluded. That journey must begin with better data — data that reveals, rather than obscures, the gaps that matter most.
