As UPI-based transactions continue to break all records, India's e-commerce market is expected to grow from $83 billion in 2022 to $150 billion in 2026, as cash transactions decline further, according to a report released on Thursday.

According to the '2023 Global Payments Report' by global financial technology leader FIS, UPI recorded the highest year-on-year growth in transaction volume of 74.1 percent as of January 2023, and digital wallets grew from 5% in 2019 to 35% of POS value in 2022, fueled by UPI.

With cash use declining from 71% of POS transaction value in 2019 to 27% in 2022, India has emerged as a global payments leader with the development of its next-generation real-time payments (RTP) infrastructure.

According to the findings, UPI has helped e-commerce account-to-account (A2A) payments grow to $12 billion, up 53% from 2021 to 2022.

"UPI is driving consumers away from cash and helping to drive financial inclusion all at the same time, and is making India a leader in payments across not just the region, but the globe," said Phil Pomford, General Manager APAC, Worldpay Merchant Solutions at FIS.

Other central banks' development of real-time payment schemes – and, crucially, cooperation among those central banks – is also helping to fuel cross-border commerce, providing merchants with a significant opportunity for growth in the future, he added.

While cash is still used, UPI is now used for the majority of peer-to-peer transactions.

According to the data, cash's transaction value is expected to fall by 34% by 2026, while digital wallets' transaction value is expected to rise by 88% by 2026.

The online ecommerce market is expected to grow by 82% by 2026, providing a further boost to digital payments.

The Reserve Bank of India (RBI) governor, Shaktikanta Das, stated earlier this month that UPI payments have grown exponentially in the last year, with daily transactions surpassing 36 crore, up from 24 crore in February 2022. These transactions totaled Rs 6.27 lakh crore in value.