India’s Unified Payments Interface recorded its busiest month yet in October, processing 25.47 billion transactions worth a record ₹31.53 lakh crore, as festive shopping and online sales pushed digital payment activity to new highs.

Data from the National Payments Corporation of India showed that transaction volumes rose 5.8 per cent from September and increased 23 per cent compared with October last year. The value of transactions grew 16 per cent year on year, reaching an all time high of more than ₹31.5 lakh crore.

The surge reflected strong consumer spending during the festive season, particularly around Navratri and Durga Puja. Online sales, retail purchases and higher spending across travel, dining and lifestyle categories also contributed to the increase.

UPI has become the backbone of India’s fast expanding digital payments system. The platform allows users to transfer money instantly between bank accounts through mobile applications and has steadily expanded from small everyday purchases to larger consumer payments.

As of September, 756 banks were live on the UPI network, underlining the scale of its integration across India’s banking system.

The October numbers also revealed an interesting shift in payment patterns. Transaction volumes grew faster than transaction value compared with the same month last year, but average transaction sizes appeared to strengthen during September and October after a longer period of decline.

Festival timing played a major role in the annual comparison.

Last year, Dhanteras and Diwali fell in October, concentrating a large share of high value festive purchases in that month. This year, both major shopping events fell in November, meaning some of the biggest festival transactions were pushed into the following month.

Reeju Datta, Co founder of Cashfree, said UPI had crossed another major milestone by processing more than ₹1 lakh crore in payments in a single day for the first time.

He said the different festival calendar explained why transaction value grew more slowly than the number of transactions on an annual basis.

Datta said major festival buying had taken place in October last year because Dhanteras and Diwali fell during that month. This year, the shift to November meant that some of the highest value purchases had yet to be reflected in October’s figures.

That could mean another strong month ahead.

Transaction activity is expected to rise further in November as consumers increase spending around Diwali and Dhanteras. Electronics, apparel, gifts, household goods and gold purchases are likely to generate significant payment volumes and values.

Akshay Mehrotra, Managing Director and Group CEO of Fibe, said the festive season had accelerated consumer spending across several categories. He said purchases linked to electronics, clothing, gifts and household essentials were expected to increase ahead of Diwali, while Dhanteras could drive larger payments for gold and other traditional purchases.

The record figures also renewed attention on the long term economics of India’s digital payments infrastructure.

UPI transactions have expanded rapidly, but the growing scale of the network has raised questions about how payment companies, banks and other participants can maintain infrastructure while keeping transactions affordable.

The proposed Merchant Discount Rate framework has brought that debate into sharper focus. The framework was initially expected to take effect on October 15 but was reportedly deferred until after Diwali.

Mehrotra said the challenge would be to ensure that digital payments remain affordable for consumers and merchants while creating a commercially sustainable ecosystem for companies supporting the network.

For now, the October data shows the continued strength of India’s digital payments revolution. More people are using UPI. They are using it more frequently. And increasingly, they are using it for larger transactions.

With the biggest festival shopping days falling in November, the next set of NPCI data will show whether October’s record was simply another milestone or the beginning of an even bigger festive surge.