UPI fuels $5.8 bn funding boom in India’s payments sector

New Delhi: India’s payments sector has attracted nearly $5.8 billion in funding across 371 disclosed equity rounds since 2021, highlighting the growth of the private digital-payments ecosystem built around the Unified Payments Interface, according to a report by market intelligence platform Tracxn.

The report, titled “The India Payments Landscape: How UPI Made India Self-Reliant in Payments”, said consumer-focused payment platforms received the largest share of investment, accounting for about 53 per cent, or roughly $3.1 billion.

Business payments firms attracted around 38 per cent of total funding, while payment infrastructure and API-based enablers accounted for the remaining 9 per cent, or about $526 million.

The sector’s funding activity peaked during the technology investment boom of 2021 before slowing amid the wider funding downturn from 2022 to 2024. However, the industry has since shown signs of maturity, with companies generating exits and recycling capital.

Since 2021, India’s payments industry has recorded eight initial public offerings and 25 acquisitions, indicating increasing consolidation and the emergence of a group of well-funded companies.

Tracxn said UPI’s public digital infrastructure, which does not charge merchants for transactions, has helped create and scale a private industry spanning consumer payment apps, business payments platforms and fintech infrastructure providers.