India likely to have a 50% non-cash economy by FY26

India is expected to become a 50 per cent non-cash economy in consumption in the next three years, with person-to-merchant digital transactions reaching over $1.5 trillion by FY26, a report showed on Thursday.

India’s household consumption is expected to reach more than $3 trillion by FY26, largely propelled by the upper-middle and high-income segments, with UPI payments likely making up a significant portion at around $1 trillion person-to-merchant (P2M) payments, according to the report from Bain & Company.

“With the current technical and financial momentum, India is expected to become a nearly 50 per cent non-cash economy in consumption in the next three years with approximately 350-400 million digital consumers,” said Saurabh Trehan, Partner and Leader of the Financial Services (FS) practice, Bain & Company.

This growth could be further propelled to 60-75 per cent in case of continued government incentives and higher traction for UPI 2.0, 123 Lite, credit on UPI, Central Bank Digital Currency (CBDC), he added.