Rising UPI Popularity Reduces Need for ATMs; Online Transactions Up, Cash Withdrawals Down

UPI Transactions: Since the inception of digital payment systems in India, people have enthusiastically embraced UPI for all types of transactions. Consequently, the practice of withdrawing cash from ATMs has significantly declined.

UPI Transactions: The introduction of digital payment systems in India has sparked immense popularity among the public. In just a few years, digital payments have rapidly transformed how people spend money and make payments. People now prefer UPI QR codes and online card payments over withdrawing cash. This shift is driving the adoption of digital payments across the country while reducing reliance on traditional methods like ATMs and micro-ATMs.

RBI Releases Data

The Reserve Bank of India (RBI) recently released data regarding these trends. According to the figures, the number of UPI QR codes in the country rose by 16.9% year-on-year to reach 79.26 crore by the end of June 2026. Meanwhile, the number of micro-ATMs fell by 8.4% to below 13.4 lakh. The number of off-site ATMs also declined by 6.8% to 73,426. The total number of ATMs and cash recyclers in the country stood at approximately 2.10 lakh.

Decline in ATM Cash Withdrawals

The rise of digital payments has directly impacted cash transactions. In the 2025-26 fiscal year, the volume of ATM cash withdrawal transactions dropped by 11%, indicating that people are withdrawing less cash than before. Conversely, the total value of cashless payments in the country increased by 22%, with the ratio reaching nearly 35% of the GDP.

Card-Based Payments

Changes have also been observed in card-based payment habits. Online shopping transactions using credit cards saw a year-on-year increase of 30.6%. Currently, online purchases account for approximately 63% of total credit card spending. In contrast, debit card payments at merchant outlets declined by 12.3%, and cash withdrawals via debit cards at ATMs fell by 8.6%.

Changes in the ATM Network

Banks are now adapting ATM facilities to better suit customer needs. The number of ATMs and cash recyclers installed within bank branches rose by approximately 3.9% to reach 1.36 lakh. Conversely, the number of ATMs located outside bank branches decreased by 6.8%. This clearly indicates that India's payment ecosystem is gradually shifting from a cash- and machine-centric model to one driven by mobile and internet technologies. UPI QR codes and online payments are growing rapidly, while cash withdrawals and the use of traditional payment systems are declining.