India is one of the fastest-growing digital payments markets in the world. In 2025, merchants looking to sell to Indian consumers will find a landscape shaped by rapid adoption of mobile payments, new technologies like UPI Lite, and evolving customer expectations. The country processed more than 16 billion UPI transactions in a single month in late 2024, reflecting its shift away from cash and toward instant, secure digital methods.
This growth is not just impressive in scale. It also represents a diverse set of payment methods that businesses need to support if they want to succeed in India. From local wallets to credit cards and emerging options like the RBI’s digital rupee, merchants face both opportunities and challenges in offering the right choices to their customers.
Understanding these payment methods is essential for building trust, reducing checkout abandonment, and maintaining high approval rates. This guide explores the most popular payment options in India for 2025, outlines emerging trends, and offers practical advice for merchants preparing to enter or expand in the market.
India’s payments market is now among the most dynamic in the world. Over the past decade, the country has shifted from being predominantly cash-based to becoming a leader in digital transactions. This transformation has been driven by several factors, including widespread smartphone adoption, government-backed initiatives, and growing consumer trust in online payments.
The Unified Payments Interface (UPI) stands out as the single biggest change agent. Introduced by the National Payments Corporation of India (NPCI), UPI allows instant, secure, bank-to-bank transfers using mobile apps. In December 2024 alone, UPI processed over 16 billion transactions. Its popularity is expected to keep growing in 2025, thanks to features like UPI Lite for low-value offline payments and UPI 123Pay, which enables transactions on basic phones without internet access.
While UPI dominates the digital payment conversation, other methods remain important. Digital wallets such as Paytm and PhonePe continue to be widely used, often building on top of UPI infrastructure to offer added services. Credit and debit cards have also maintained strong adoption rates, with co-branded and EMI options gaining traction among urban consumers. Net banking remains a popular choice for high-value online purchases, while cash on delivery still serves specific customer segments, particularly in rural or semi-urban areas.
Merchants planning to enter the Indian market in 2025 need to understand this mix. Supporting the right payment methods is essential for meeting customer expectations, boosting conversion rates, and staying competitive in a market where loyalty can hinge on convenience and trust.
Merchants entering or expanding in India need to plan for a diverse set of payment preferences. While UPI leads in transaction volume, consumers still use wallets, cards, net banking, and even cash in certain scenarios. Understanding these options helps merchants tailor their checkout experience and improve approval rates.
Unified Payments Interface (UPI) is the centerpiece of India’s digital payment ecosystem. It allows customers to link multiple bank accounts to a single app and pay instantly using QR codes, phone numbers, or virtual payment addresses. UPI is popular because of its speed, security, and zero-cost model for most users.
New features have expanded its reach even further. UPI Lite enables small offline transactions without an internet connection, making it accessible in areas with spotty coverage. UPI 123Pay supports basic feature phones, allowing people without smartphones to make digital payments through voice prompts and simple menus. These innovations are expected to keep UPI at the forefront of India’s payment growth through 2025 and beyond.
For merchants, integrating UPI is essential. It is often the most requested option at checkout and can improve customer trust and satisfaction.
Digital wallets remain popular in India, often serving as an easy entry point for new online shoppers. Platforms like Paytm, PhonePe, and Google Pay dominate the space, offering stored value, cashback rewards, and streamlined checkout experiences. Many wallets are tightly integrated with UPI, letting users make payments from linked bank accounts without entering details repeatedly.
Wallet usage is especially strong for utility payments, small-value transactions, and promotional campaigns. Merchants benefit from supporting wallets by tapping into these habits and offering payment experiences customers know and trust.
Cards continue to play a major role in Indian ecommerce, particularly for higher-value purchases. Credit card ownership is growing steadily, with co-branded and EMI-enabled cards gaining traction in urban centers. These options allow customers to pay in installments, making larger purchases more accessible.
Debit cards remain widespread, often linked to salary or savings accounts. Many customers use them for online transactions, provided merchants support secure protocols like two-factor authentication and 3D Secure.
For merchants, offering both credit and debit card acceptance is essential to avoid alienating well-established payment audiences.
Net banking allows customers to pay directly from their bank accounts through online interfaces. It is widely used for ecommerce, bill payments, and service bookings, especially among customers who prefer not to store card details or use wallets.
While UPI has taken over many use cases once dominated by net banking, this option remains popular for larger transactions and business-to-business payments. Supporting net banking ensures merchants can serve a broader segment of customers, including those who prefer more traditional online banking.
Cash remains part of India’s payment landscape, particularly through cash on delivery (COD) for ecommerce. Although its share has declined with the rise of digital options, COD is still popular in rural and semi-urban regions where trust in online payments may be lower or digital infrastructure is limited.
Merchants offering COD can expand their reach but must plan for logistics, cash handling costs, and higher risk of order rejections. Supporting cash thoughtfully can help capture customers who might not complete an order otherwise.
India’s payment ecosystem is not standing still. It is evolving quickly, with new technologies and policies shaping how customers pay and how merchants need to adapt. Staying ahead of these trends is essential for businesses that want to serve Indian customers effectively in 2025 and beyond.
The Reserve Bank of India (RBI) is piloting its own Central Bank Digital Currency (CBDC), known as the digital rupee. This government-backed digital money aims to provide the benefits of cash in a digital format, with instant settlement and lower costs. While adoption is in early stages, merchants should watch this space closely, as future integration may open up new ways to reach customers securely and at lower cost.
Biometric security is gaining ground in India’s payment flows. Banks and fintechs are integrating fingerprint and facial recognition into their apps to streamline logins and approvals. This improves security without adding friction for users, making it easier for customers to trust digital payments. Merchants should ensure their payment partners support these advanced authentication options to reduce fraud and improve user experience.
With fraud attempts increasing alongside digital payment volumes, payment providers are investing in AI and machine learning to spot suspicious patterns in real time. For merchants, partnering with providers who use advanced fraud detection helps prevent chargebacks and maintain approval rates without making checkout cumbersome for genuine customers.
India’s diverse infrastructure needs have inspired solutions like UPI Lite for offline payments and UPI 123Pay for basic mobile phones without internet access. These features expand digital payments to more users, especially in semi-urban and rural areas. Merchants integrating UPI through a payment orchestration layer can easily support these options without maintaining multiple direct integrations.
As these trends mature, supporting local payment methods becomes even more important. Offering UPI, local wallets, and familiar cards is no longer optional for serious merchants. Customers expect to see their preferred options at checkout. Businesses that fail to adapt risk losing conversions to competitors who invest in the right integrations.
For merchants looking to manage this growing complexity, payment orchestration platforms can unify diverse methods and providers under one integration, making it easier to keep up with changing trends and customer expectations.
Reaching Indian customers effectively means doing more than just launching a website. It requires understanding and supporting the payment methods they trust and use every day. A successful strategy adapts to local expectations while ensuring smooth integration with existing systems.
One of the most effective ways to improve approval rates in India is to work with local acquirers. Transactions processed through local banks often see fewer declines than cross-border attempts. Local acquiring also helps avoid unnecessary foreign exchange fees that can add costs for both merchants and customers.
Cross-border sales can introduce hidden costs, from FX conversion fees to higher processing charges. By partnering with local PSPs and acquirers, merchants can reduce these costs and price more competitively. This strategy also improves the customer experience by offering transparent, local currency pricing.
Supporting UPI is essential for any merchant in India. Customers expect to see UPI options at checkout, and failing to offer it can lead to high abandonment rates. In addition, adding major wallets like Paytm, PhonePe, and Google Pay expands reach, especially among mobile-first shoppers.
Card payments also remain important, particularly for EMI purchases and higher-value transactions. Merchants should ensure they support both debit and credit cards with secure, frictionless authentication flows.
For more on supporting region-specific methods, see our guide on popular payment methods in Europe for ideas on local adaptation.
High approval rates depend on smart routing of transactions. Using payment orchestration, merchants can route payments to the most effective provider based on geography, cost, and real-time performance. This flexibility helps avoid declines, manage fraud risk, and maintain a seamless checkout even under heavy load.
Managing multiple local payment methods can be complex if handled one provider at a time. Payment orchestration platforms consolidate these integrations into a single layer. Merchants gain a unified API, centralized management, and consistent reporting across all payment methods.
This approach reduces engineering workload, shortens time to market, and makes it easier to add or adjust providers as customer preferences evolve.
As India’s payment ecosystem grows more complex, managing it well becomes essential for merchants. Payment orchestration provides a technology layer that simplifies this complexity by unifying payment providers, methods, and fraud tools into a single, centralized system.
Instead of building and maintaining multiple direct integrations, merchants can connect once to an orchestration platform and gain access to a wide range of payment methods. This approach makes it easier to support local options like UPI, wallets, and domestic card networks without overloading engineering teams.
Orchestration also improves transaction routing. Merchants can define rules to route payments to the most effective provider based on geography, currency, or real-time performance. This flexibility helps reduce declines and ensures transactions complete smoothly, even during high-volume events like holiday sales.
For fraud management, orchestration centralizes control across providers. Merchants can apply consistent fraud rules, use multiple tools in parallel, and adjust strategies quickly in response to changing threats.
Reporting is another advantage. A single dashboard provides visibility into transaction performance across all providers and methods. This helps finance and operations teams identify issues, optimize costs, and make better decisions about future growth.
Ultimately, payment orchestration helps merchants deliver a better checkout experience. By supporting the payment methods customers prefer and maintaining high approval rates, businesses can increase conversions and build trust with Indian shoppers.
Entering the Indian market requires thoughtful planning, especially when it comes to payments. Below is a clear action plan to help merchants prepare and execute a strategy that aligns with local customer expectations.
Understand which payment methods your target audience uses most. UPI is essential, but wallet usage, card adoption, and regional differences matter too. Studying these trends helps prioritize integrations that will deliver the best return.
Work with payment service providers that have a proven track record in India. Local providers often offer better approval rates, local acquiring capabilities, and support for region-specific payment methods.
UPI is non-negotiable for merchants looking to reach Indian customers. Supporting popular wallets such as Paytm, PhonePe, and Google Pay ensures you cover customers who rely on these apps for everyday transactions.
Balance strong fraud controls with a smooth customer experience. Use tools that offer adaptive authentication and allow legitimate transactions while blocking suspicious activity. Monitor fraud patterns closely, especially during sales events or promotions.
Conduct user testing with local shoppers to identify potential issues with language, currency, and payment methods. Make sure the checkout process is intuitive and supports preferred payment options without unnecessary steps.
After launch, track payment approval rates, declines, and customer feedback. Use this data to refine routing rules, add new payment methods, or adjust fraud settings. Staying responsive ensures the payment experience evolves with customer expectations.
Which payment method is used in India?
UPI is the most widely used digital payment method in India, thanks to its ease of use and instant transfers. Wallets, cards, net banking, and cash on delivery also remain popular in different contexts.
How do foreigners pay in India?
Foreigners can use international credit and debit cards at many merchants, but acceptance may vary. For in-country convenience, some visitors use travel cards or local wallets once registered with an Indian mobile number and bank account.
What is the preferred payment method in India?
UPI is the leading choice for most consumers. It is used for everything from small everyday purchases to larger online transactions. Wallets and cards are also widely used, depending on the customer segment.
What is the best way to pay in India?
For residents, UPI is generally the easiest and most accepted digital option. For visitors, credit or debit cards are often the simplest, though carrying some cash is recommended in areas with limited digital infrastructure.
How do tourists pay for things in India?
Tourists often rely on international credit or debit cards, which are widely accepted in urban centers, hotels, and larger retailers. It is also common to carry cash for smaller shops or rural areas.
How can merchants support multiple payment methods?
Merchants can work with payment providers that offer broad local support, or use orchestration to manage multiple PSPs and payment methods through a single integration. This ensures they can meet diverse customer expectations without adding operational complexity.
The growth of UPI, the popularity of digital wallets, and the continued role of cards and cash mean that customers expect flexibility and convenience at checkout. Successfully serving this market requires more than just adding a payment gateway. It demands a strategy that supports local preferences, ensures high approval rates, and delivers a seamless experience across channels.
Merchants who invest in understanding these methods and integrating them effectively can build stronger customer relationships and increase conversion rates. Managing this complexity does not have to be overwhelming. Payment orchestration provides a way to unify providers, simplify integrations, and maintain full control over the customer journey.
If you want to simplify your payment stack while supporting India’s most popular payment methods, contact Gr4vy to learn how payment orchestration can help you grow with confidence.
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