Despite surge in digital payments in India, Cash remains resilient with 50 per cent share: Care Edge Report

New Delhi [India], October 14 (ANI): Despite the massive surge in digital payments across the country, cash continues to hold a strong position in India's payment ecosystem, accounting for nearly half of all transactions.
According to a report by Care Edge Ratings, cash usage in Private Final Consumption Expenditure (PFCE) is estimated to have maintained a 50 per cent share as of Q1FY26.
The report highlighted that despite the huge growth in digital transactions over the years, cash remains resilient and continues to coexist with digital modes of payment.
It stated "Despite such huge growth in digital transactions, cash remains resilient. Cash usage in Private Final Consumption Expenditure (PFCE) is estimated to have reached a 50 per cent share as of Q1FY26".
While digital payments are likely to dominate in the coming years, the traditional cash-based payment method still plays a crucial role in the Indian economy, especially in rural and semi-urban regions.
On the other hand, the share of digital payments in retail transactions has reached an impressive 99.8 per cent, making paper-based instruments such as cheques nearly obsolete.
This transformation has been driven by strong policy initiatives, robust infrastructure support, and deep fintech penetration in the country.
The government's push for a cashless economy, along with the rapid growth of the financial technology sector, has helped India move towards a more digital-driven payment structure.
Rising internet penetration has played a major role in this shift. Internet usage in India has grown from 60.7 per cent in March 2021 to 70.9 per cent by June 2025 and is expected to reach around 85 per cent by 2028.
Along with this, the increasing use of smartphones has accelerated the adoption of digital payments, bringing previously unbanked populations into the formal digital economy and promoting financial inclusion.
The report also highlighted that the Unified Payments Interface (UPI) has been the driving force behind this behavioural change. UPI recorded 54.9 billion transactions in Q1FY26 and 185.9 billion transactions in FY25.
It grew at a compound annual growth rate (CAGR) of 49 per cent between FY23 and FY25, showing strong adoption even in tier 2 and tier 3 cities.
The report also mentioned that UPI is expected to continue its rapid growth, further strengthening its dominance in India's digital payments landscape while cash continues to coexist as a preferred mode of payment for many. (ANI)