94% of small merchants surveyed now accept UPI — and the QR code count has grown 4x in four years.
India's Small Shops Went Digital Faster Than Anyone Planned
94% of small Indian merchants surveyed have adopted UPI, and active QR codes have grown roughly 4x since 2022. Here's why QR codes won over card machines.
There's a version of "India went cashless" that's mostly about metros and card machines. The more accurate version is smaller and more remarkable: it happened at the kirana counter, with a printed QR code and zero hardware cost.
The numbers
- 94% of small merchants surveyed in a recent government-commissioned study had adopted UPI.
- 1,922 lakh → 7,854 lakh — the growth in UPI and Bharat QR deployments between May 2022 and May 2026, roughly a 4x increase.
- 709 million+ active UPI QR codes across India, up 21% since July 2024 alone.
- 67.01 billion — Person-to-Merchant (P2M) UPI transactions in H1 2025, up 37% year-over-year.
- 45.2 lakh → 115.3 lakh — the parallel, slower growth in physical card-payment terminals between May 2021 and May 2026.
Why QR codes won, not card machines
The gap between QR growth and PoS terminal growth isn't an accident — it's a cost story. A printed UPI QR code costs a merchant essentially nothing to display and requires no hardware, maintenance fee, or bank tie-up beyond a basic account. A card machine requires upfront hardware, a rental or purchase cost, and often a minimum transaction volume to justify it. For the small kirana stores, roadside vendors, and rural markets driving most of this adoption curve, that cost difference is the whole story.
Why it matters
The 94% adoption figure among small merchants is close enough to universal that "does this shop accept digital payments" is no longer a meaningful question in most of urban and increasingly rural India — the more useful question now is what merchants do with the transaction data QR-based payments generate, from credit-scoring for working-capital loans to simple sales analytics that most small shop owners never had access to before.
Sources
Small Merchants Built UPI's Reach, Business Standard, Rise of Payments Enabling Merchant Digitisation, Mintoak.
Frequently asked questions
Close to it — a government-commissioned study found 94% of small merchants surveyed had adopted UPI, and active QR code deployments have grown roughly 4x since 2022, reaching over 700 million codes covering kiranas, pharmacies, transport hubs, and rural markets.
Not disappearing, but growing much more slowly — PoS terminals grew from 45.2 lakh to 115.3 lakh between May 2021 and May 2026, a meaningful increase but far smaller in relative terms than UPI QR code growth over the same period, since QR deployment requires no hardware cost for the merchant.