UPI, QR PAYMENTS AND DECLINE OF CASH: MEASURING THE FINANCIAL INCLUSION IMPACT WITH REFERENCE TO SURAT CITY

Abstract

The rise of Unified Payments Interface (UPI) and QR code–based payments in India has transformed the nation’s financial landscape, reducing reliance on cash and accelerating the journey toward digital financial inclusion. UPI, launched in 2016 by the National Payments Corporation of India (NPCI), has emerged as the fastest-growing real-time payment system globally, enabling seamless, interoperable, and cost-effective transactions. QR code payments, in parallel, have provided a low-cost entry point for millions of small and micro-merchants, eliminating the need for traditional point-of-sale infrastructure and fostering digital acceptance in both urban and rural settings.

This study examines the linkages between UPI adoption, QR code penetration, and the measurable decline of cash usage in India, while emphasizing their implications for financial inclusion. Drawing on secondary data from the Reserve Bank of India, NPCI, and the World Bank, along with survey-based insights from consumers and merchants, the research highlights three major outcomes: (1) UPI and QR payments are steadily replacing cash in low- and mid-value retail transactions, (2) the adoption of digital payments has expanded access to formal finance among previously underserved populations such as women, youth, and rural consumers, and (3) small businesses are increasingly empowered by the ability to transact digitally without high entry costs.

The findings suggest that India’s digital payment ecosystem is not only reshaping consumer behaviour but also strengthening financial inclusion by making financial services more accessible, affordable, and inclusive. However, challenges such as digital literacy gaps, infrastructure limitations, and cyber security risks remain critical for sustaining long-term impact.