RuPay’s Market Share Climbs to 18% in October Driven by UPI Linkage

RuPay, the domestic card network operated by the National Payments Corporation of India (NPCI), captured 18% of India’s credit card market share in October 2025.

The milestone is being credited largely to a surge in credit card transactions facilitated through UPI (Unified Payments Interface), industry sources told Moneycontrol. (MoneyControl). 

Key Numbers at a Glance

More Details about UPI & RuPay Penetration 

• UPI-Linked Credit Cards: Only RuPay credit cards are currently permitted to integrate with UPI. This allows users to make credit-card transactions via QR codes and UPI apps, benefiting from the reach of UPI’s merchant network. (MoneyControl). 
• Ticket Size Differences: The average RuPay credit card UPI transaction value is significantly lower (~₹1,000–₹3,400) than Visa or Mastercard (~₹4,300), reflecting smaller-ticket use. (MoneyControl). 
• Fee Structure & MDR: Merchant Discount Rate (MDR) rules offer relief for smaller merchants: transactions under ₹2,000 may have reduced or no MDR, helping enable UPI adoption. Larger merchants or transactions above that threshold incur standard MDR. (MoneyControl). 
• Credit Access Growth: Virtual RuPay credit cards, some secured against fixed deposits, and cards issued by fintechs have made the product accessible to consumers who lack traditional credit histories. Annual interest-free credit period remains around 40–50 days. (MoneyControl). 

Why the Surge Now? 

The recent accelerated growth stems from a combination of regulatory changes, underlying infrastructure, and shifting consumer habits:

• In late 2022, RBI permissions allowed RuPay credit cards to be linked exclusively with UPI. (The Economic Times). 
• The UPI network has rapidly scaled: over 50 million merchants accept UPI payments, vastly outnumbering the <10 million POS terminals that accept credit card swipe/tap. (The Economic Times). 
• Consumers show a strong preference for “scan-and-pay” offline transactions. RuPay credit cards via UPI facilitate that behavior, leading to increased usage, especially in small towns and for everyday purchases. (MoneyControl). 
• October was the festive month with multiple mandatory festive spends in almost all families. This has definitely led to an increase in penetration as UPI transactions were at all time high of over 20 billion in Oct, 2025. (The Economic Times)

Comparisons: RuPay vs. Global Players

What an Expert Feels about the Shift?

 “A combination of wider merchant acceptance and a lower MDR structure for smaller merchants has accelerated adoption,” said Pranav Gundlapalle, Head of India Financials at Bernstein. (The Economic Times). 

Current Credit Card Market Size & Trends

• India currently has about 11 crore (110 million) active credit cards as per RBI/RuPay industry estimates. (MoneyControl). 
• UPI now accounts for about 85% of all digital transactions by volume (general). 
• Previously, RuPay’s credit cards had just ~3% share two years ago; now it’s between 16–18% depending on the metric (issuance, transaction volume, spend share). (UpStox). 

What This Means for Consumers & Merchants? 

• Consumers: More credit card options tied to UPI, especially as fintech firms and virtual cards expand (like Kiwi Rupay Card). Easier use at small shops via QR codes with credit. Low or no MDR for smaller bills reduces hidden costs. (MoneyControl). 
• Small Merchants: Benefit from accepting credit cards via UPI without needing expensive POS hardware. However, when transactions exceed ₹2,000 or merchants are large, MDR still applies, and some merchants are disabling credit card via UPI due to cost concerns. (MoneyControl). 
• Banks & Fintechs: RuPay’s rise loosens Visa/Mastercard’s dominance. Issuers now have reason to promote RuPay-linked credit cards. Virtual credit cards may become more prevalent. (MoneyControl). 

We Think It’s A Structural Shift, Not Just a Moment

RuPay’s growth is not a temporary spike; it reflects changes in the regulatory architecture and consumer behavior. UPI integration with credit cards has unlocked access to tens of millions of merchants and everyday use cases. 

However, profitability may depend on how MDR rules evolve. If MDR incentives remain favorable for small merchants, usage will likely continue to grow. If not, merchant pushback may throttle this momentum.

What to Watch Next? 

• Will MDR thresholds (e.g. Rs 2,000) or benefits be revised? Changes would affect both merchant acceptance and RuPay’s cost structure.
• How rapidly will virtual or secured RuPay credit cards become mainstream vs. traditional cards?
• Will Visa/Mastercard seek regulatory changes or workarounds to link with UPI, or expand their acceptance via similar rails?
• Will average ticket size adjust upward, indicating move from small everyday spend to larger purchases? That would change revenue dynamics.

What This Means for You? 

If you are a consumer in India, linking RuPay credit cards with UPI gives more flexibility. Everyday purchases (from groceries and cafes to local shops) can often be made using credit without needing a physical card or POS.

Rewards and credit terms remain similar: 40–50-day interest-free period, reward points, but the real benefit is usage of credit cards where traditional cards weren’t accepted before.

And as a small business, acceptance of RuPay + UPI gives you access to credit payments without major hardware investment. But remember, check your MDR exposure: above certain transaction sizes, costs still apply.