Debit Card Usage Falls Sharply As UPI And Credit Cards Gain Ground

Debit card transactions in India dropped 67% between 2021 and 2025 as digital payment platforms and credit cards gained wider acceptance across retail and online spending, according to the Reserve Bank of India’s latest Payment Systems Report.

The RBI data showed debit card transaction volumes declined from 4.087 billion in calendar year 2021 to 1.336 billion in 2025.

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The total value of debit card transactions also fell during the period, declining from ₹7.4 lakh crore to ₹4.5 lakh crore.

According to the report, debit card transaction volumes recorded a compounded annual decline of 24.4%, while transaction value contracted at an annual rate of 11.7%.

The central bank attributed the decline largely to growing adoption of Unified Payments Interface (UPI), digital wallets, and credit cards across consumer payment categories.

Credit Card Transactions More Than Double

The use of debit cards declined, but credit card expenditures soared during the same period. Credit card transaction volumes rose from 2.16 billion in 2021 to 5.7 billion in 2025, according to RBI data.

Credit card transaction values increased from ₹8.9 lakh crore to ₹23.2 lakh crore over the same time span. According to the report by RBI, the annual growth rate of credit card transaction volumes and values was nearly 27%.

These statistics reflect changing consumption patterns of the customers, especially in the context of online shopping and short-term credit utilization.

Debit Cards Still Lead In Total Issuance

Even with the reduced number of transactions, debit cards have still remained dominant among all kinds of card instruments in the Indian market, with there being 1.0343 billion debit cards in December 2025 compared to 115.8 million credit cards.

RBI indicated that debit cards are mainly used today in cash withdrawals and general banking operations, rather than merchant payments. Credit cards have become popular mostly for online shopping and credit purposes.

Public Sector Banks Retain Majority Share

Public sector banks also remained dominant in the number of issued debit cards in India. As per RBI’s report, the public sector banks had an 63.1% share in India’s debit card segment as of December 2025, although down from the 67.9% share recorded as of December 2021.

The share of private sector banks, on the other hand, increased in India’s debit card segment from 20.6% in December 2021 to 25.1% in December 2025.

Moreover, RBI noted the fast-growing payment ecosystem of India, driven by UPI services. According to the RBI, the proportion of payment transaction volume processed by UPI was at 85.5% during the second half of 2025.

This is an indication of increasing usage of app-based transactions due to the growth in the digital payment system, widespread use of smartphones, and QR code payments at merchants.