Digital merchant payments likely to recover in Oct-Nov on festive spending, post

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UPI person-to-merchant (P2M) transactions recorded a strong growth of 23.3% YoY during September, while credit card spending declined 5.9%

By ANI

Updated - October 30, 2026 at 11:10 AM. | New Delhi

Digital payments to merchants are expected to recover in October and November, supported by increased spending during the festive season, according to a report by Equirus Securities. The report said digital merchant payments declined 0.8 per cent month-on-month (MoM) to ₹11.4 trillion in September 2026. However, they registered a growth of 15.7 per cent year-on-year (YoY).

UPI person-to-merchant (P2M) transactions recorded a strong growth of 23.3 per cent YoY during September, while credit card spending declined 5.9 per cent. The report attributed the decline in credit card spending mainly to a shift in the festive calendar rather than a slowdown in consumer demand. It noted that Navratri fell in September in 2025, compared with October this year.

As a result, September 2025 saw nine days of festive spending, taking credit card expenditure around 13 per cent above the average recorded in July and August 2025. “With Diwali on 8 Nov'26 (vs 20 Oct'25), we expect the festive lift in Oct-Nov'26,” Equirus said.

On a month-on-month basis, UPI-P2M spending declined 0.9 per cent in September, while credit card spending increased 0.7 per cent. Debit card and prepaid payment instrument (PPI) spending fell 7.3 per cent and 6.4 per cent, respectively.

“The share of UPI-P2M in total digital spends eased to 77.6 per cent (-8bps m-o-m) while that of credit cards stood at 17.8 per cent vs. the past 12-month average of ~19 per cent,” the report noted. Credit card spending stood at ₹2.04 trillion in September 2026, registering a marginal increase over the previous month despite declining on an annual basis.

Highlighting the spending pattern, the report said, “E-com spends constituted 61.9 per cent of total credit card spends in Sep'26. Average monthly e-com spends per card were at ₹10,061 and average POS spends at ₹6,204.”

The total number of cards in force (CIF) across the industry increased by 12.62 lakh during September, taking the overall number of cards to 12.53 crore. Meanwhile, debit card spending continued to remain weak compared with other digital payment modes. The report said, “Debit card spends decreased by 7.6 per cent yoy and were down 7.3 per cent m-o-m. Growth in debit card spends continues to lag credit card and UPI.”

Published on October 30, 2026

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