Quick Take
- Hyderabad leads India with 82% digital transaction adoption
- UPI processed ₹24.03 lakh crore in June, up 32% year-on-year
- AI streamlines fintech workflows as translator for development teams
- 74% of retail spending across India’s top 29 cities now digital
- Rural areas lag behind due to connectivity and literacy challenges
Hyderabad has become India’s digital payments capital, with 82% of retail transactions now happening digitally, according to NeoGrowth’s latest “How India Pays” report.
The southern city has emerged as the country’s digital payments frontrunner, just ahead of tech centers Bengaluru and Pune, which both hit 79% adoption rates. This jump reflects a massive shift across India’s cities, where three-quarters of all retail spending in the top 29 cities now goes through digital channels.
Urban Areas Power National Growth
The digital payments boom reaches beyond major metros. Tier-two cities are making impressive gains. Visakhapatnam hit 76% digital adoption while Nagpur reached 71%, showing the fintech wave isn’t limited to traditional IT hubs.
But the change isn’t happening everywhere at the same pace. Cities like Kolkata (55%) and Jamshedpur (54%) still prefer cash, highlighting gaps in digital infrastructure and how people pay across different regions.
Looking at specific sectors tells an interesting story. Personal grooming services top the list at 83% digital use, followed by education (81%) and restaurants (80%). Young business owners are embracing digital payments particularly fast, with nearly 80% of their revenue coming from digital sources.
AI Changes How Fintech Companies Work
Artificial intelligence is transforming how fintech companies build products and manage workflows. At DevSparks Chennai 2025, Dinesh Varadharajan, Chief Product Officer at Kissflow, described AI as a “workflow translator” that cuts out unnecessary steps rather than replacing human creativity.
“AI should handle mundane tasks while teams focus on strategic and creative development,” Varadharajan emphasized, advocating for rapid prototyping and earlier product releases. This approach is gaining traction among development teams seeking to accelerate product lifecycle management.
UPI Dominates Global Real-Time Payments
India’s Unified Payments Interface (UPI) keeps growing at a remarkable pace, processing ₹24.03 lakh crore in transactions during June alone—a 32% jump from last year. The platform now handles roughly 85% of India’s digital transactions, making it the backbone of the country’s cashless economy.
UPI’s reach goes well beyond India’s borders. The payment system has successfully launched in Singapore and France, with more international partnerships in the works. This global presence makes India a leader in real-time payment technology.
Rural Areas Still Face Challenges
Despite success stories in cities, major hurdles remain in bringing digital payments to rural and smaller urban areas. Poor internet connectivity and limited digital knowledge continue to slow adoption outside big cities.
The government’s Payments Infrastructure Development Fund (PIDF) aims to fix these gaps. However, much work remains to achieve consistent digital payment acceptance across India’s varied economic regions.
The program faces particular challenges in states with lower digital adoption, where traditional banking infrastructure and consumer education need significant investment.
Technology Drives Financial Inclusion
As India moves toward a digital-first economy, success in cities like Hyderabad offers a roadmap for nationwide growth. The mix of strong UPI infrastructure, AI-enhanced business processes, and focused government programs creates a foundation for inclusive financial development.
The way forward requires ongoing efforts to improve rural connectivity, boost digital literacy programs, and ensure India’s fintech revolution benefits all citizens regardless of where they live or their economic situation.
