Not a rivalry, but a partnership, how cards and UPI are building India’s payments future together
Walk into any neighbourhood store in India today and the QR code is as familiar as the cash counter once was. It represents one of the most remarkable payment transformations anywhere in the world. In the second half of 2025, UPI accounted for nearly 85% of India’s digital payment transaction volumes and is expected to process well over 200 billion transactions in a single financial year. Few countries have built a digital payments ecosystem with such speed, scale and consumer adoption.
UPI has not made payment cards obsolete. Instead, it has redefined their role. Rather than competing with UPI, cards are becoming more specialised, more secure and increasingly focused on the transactions where they deliver unique value. This evolution is creating a new generation of payment cards designed for India’s rapidly maturing digital economy.
Different payment rails for different needs
Reserve Bank of India data tells a far more nuanced story. Debit card transaction volumes have declined significantly, from around four billion transactions in 2021 to nearly 1.3 billion in 2025, as UPI naturally absorbed low-value, high-frequency payments. Credit cards, however, have followed the opposite trajectory. Over the same period, transaction volumes have more than doubled, driven by e-commerce, higher-value purchases and growing consumer demand for formal credit.
UPI has become India’s preferred payment rail for everyday transactions because it delivers unmatched convenience and speed. Cards, meanwhile, are increasingly being used where they offer capabilities that UPI alone cannot provide, including access to credit, global acceptance, fraud protection, dispute resolution and secure authentication.
Redefining the modern payment card
As cards become associated with higher-value transactions and financial services rather than routine payments, their purpose and design must evolve accordingly.
Here are the five priorities shaping the next generation of payment cards.
Security designed from the silicon up
As cards increasingly support higher-value and credit-based transactions, the cost of fraud rises proportionately and security has to be built into the foundation of the product rather than added on later.
Technologies such as EMV chips, tokenization and dynamic authentication are no longer premium features. They are essential components of a trusted payment ecosystem. Looking ahead, issuers should also ensure they are prepared for the quantum era by adopting future-ready technologies that can evolve over time, enabling cards to remain secure and compliant as new cryptographic standards emerge.
Credit will drive the next phase of growth
India’s payments story is increasingly becoming a credit story.
Industry projections suggest that credit card transaction volumes will continue to grow rapidly, even as UPI dominates overall payment volumes. One of the strongest indicators of this trend is the emergence of credit lines on UPI, allowing consumers to make UPI payments backed by credit products.
Consumers increasingly expect to access credit through whichever payment interface they choose, which is convergence rather than competition. Supporting it requires modern card infrastructure that enables digital issuance, instant provisioning, token management and real-time lifecycle services through API-driven platforms.
Expanding financial inclusion through formal credit
UPI has transformed access to digital payments, but financial inclusion extends beyond the ability to transfer money.
For millions of Indians, a payment card represents their first formal credit product. It is often the starting point for building a credit history that unlocks future access to loans, mortgages and broader financial services.
Innovations such as secured cards, digitally issued cards and FinTech-led credit products have an important role in extending formal credit to underserved consumers. As India’s digital economy grows, expanding responsible access to credit will become just as important as expanding access to payments.
Winning the top-of-wallet position
For banks and FinTechs, success is no longer measured by how many cards they issue. It is measured by whether their card becomes the customer’s preferred way to pay.
Today’s consumers often hold multiple cards, but only a few become their “top of wallet” choice. Earning that position requires far more than attractive rewards. It demands a seamless, secure and differentiated customer experience across physical and digital channels.
Advanced payment cards are helping issuers achieve exactly that. Instant digital issuance enables customers to start transacting within minutes of approval. Tokenization allows secure provisioning into digital wallets. Premium materials such as metal, personalised designs and enhanced cardholder experiences strengthen brand affinity, while intelligent lifecycle management enables issuers to deliver timely upgrades, renewals and contextual offers.
As credit becomes increasingly embedded into digital payment experiences, including through UPI, the opportunity extends beyond the physical card. Banks and Fintechs that combine secure infrastructure, frictionless digital experiences and differentiated card propositions will be best positioned to make their card the preferred payment credential, regardless of how the customer chooses to pay.
Sustainability as a business imperative
Consumers increasingly expect sustainability to be reflected in the products they use every day, including payment cards.
Solutions such as our IMPACT Pay portfolio, manufactured using recycled PVC materials, enable issuers to reduce environmental impact without compromising security, durability or design. For younger, environmentally conscious customers, sustainable payment products are rapidly becoming an expectation rather than a differentiator.
The importance of resilience
UPI is built on real-time connectivity. While this has transformed payments, resilience remains a critical requirement for every payments ecosystem.
EMV chip cards continue to provide dependable payment capability when mobile devices run out of battery, connectivity is disrupted or consumers travel to countries where UPI acceptance is still limited. They also remain indispensable for international travel, cross-border commerce and many offline payment environments.
A resilient payments ecosystem is one that offers consumers multiple trusted ways to transact under different circumstances.
Building the future through coexistence
India’s remarkable payments success has never been about replacing one technology with another. It has been about creating an ecosystem where multiple payment methods work together to serve different consumer needs.
UPI has become the foundation for fast, frictionless everyday payments. Advanced payment cards are evolving to support secure credit, financial inclusion, global commerce, resilience and differentiated customer experiences.
In one of the world’s most dynamic payments markets, card innovation is no longer about preserving legacy infrastructure. It is about enabling the trusted, intelligent and seamless payment experiences that will complement India’s digital payment ecosystem for years to come.
By Elyette Roux, EVP Payment Services at IDEMIA Secure Transactions, a leader in payment, connectivity and cybersecurity technologies. The views expressed are personal to the author only.
