Telangana Tops States in UPI Transaction Intensity: RBI Paper Highlights Regional Trends
A recent Reserve Bank of India (RBI) paper reveals that Telangana has the highest per capita UPI transaction intensity in India. The study, using PhonePe data, shows a steady decline in ATM cash withdrawals as a percentage of GDP, indicating a shift toward digital payments. While high-value transactions are common, the growth of UPI for low-value, everyday transactions (P2M) is reflected in the rising share of peer-to-merchant payments. Regional intensity is highest in southern and western states, attributed to urban centers, economic hubs, and high levels of employment-driven migration, while northeastern states maintain higher cash demand.
Key Points
- UPI transaction intensity is measured in per capita volume terms, with Telangana leading, followed by Karnataka and Andhra Pradesh.
- There is a clear inverse relationship between the rise of UPI usage and the demand for cash in the economy.
- Peer-to-merchant (P2M) transactions are increasingly dominating the volume share, especially for ticket sizes below ₹500.
- Digital infrastructure and service-led usage are key drivers of UPI adoption in urbanized states.
- Cash withdrawal intensity remains higher in northeastern states, Kerala, and Goa due to factors like tourism and remittance inflows.
Exam Facts
- PhonePe accounts for 58% of total UPI transaction volume and 43% of the total transaction value.
- The study was published in the RBI's September 2025 bulletin titled 'Impact of UPI on Cash Demand'.
- Telangana recorded the highest UPI volume intensity per capita at 205.6.
Read it. Retain it. Recall it.
Get spaced-repetition flashcards, daily quizzes and offline access — free on Android.