For Gen Z And Millennials In India, UPI Is The New Cash

The increasing adoption of digital finance in India has led to a decline in cash transactions among the youth, especially the Gen Z and the millennials. The simplicity of technology and ease of convenience are often cited the two major reasons for this.  

Unified Payments Interface (UPI) has now become the de facto mode of payment for a majority of the youth population. For many, it is not just an alternative and a convenient method of payment, but rather the new form of cash in a rapidly expanding digital world. 

UPI Becoming Popular Among Youth Population 

With ease of access, instant transfer capabilities, and almost universal acceptance, the volume of UPI has gone sky-high in the last few years. According to the latest available data, a record-breaking 16.58 billion transactions were recorded in October 2024, the highest since UPI’s inception in 2016. 

Says Shivani Joshi, a 25-year-old marketing professional from Mumbai: “If I remember right, after demonetisation, this could be the last cash carrying time. Whether it is a stationary store, road-side vendor, or grocery, every retail house accepts UPI transactions. It’s more flexible and faster than physical currency deals.” 

Raghav Singh, a 20-year-old college student from Noida, has a similar opinion. “Carrying cash feels archaic. With UPI, I just need my phone to pay, whether it’s splitting a bill with friends or buying groceries. I don’t need to worry about having change or waiting for my turn at the ATM,” he says. 

Why UPI Resonates With Gen Z And Millennials 

The ease of use and efficiency of transactions are the chief attractions of UPI. In contrast to cash transactions, UPI does not require physical exchange, making it a significant advantage in the backdrop of the Covid-19 pandemic, which prioritised contactless transactions. Young Indians also note that UPI has allowed them to better manage their spending pattern, since they are able to monitor their transactions immediately from their banking apps. 

“It is empowering,” says Ananya, a 27-year-old college student from Delhi. “I can keep a check on my expenses in real-time. UPI allows me to stay in control of my budget, something that was harder to do when I used cash,” she says. 

Young professionals as well as students like how the UPI merges with their lifestyle.   

Adds Rahul Mehta, 24, from Bengaluru, “My smartphone is now my wallet and it contains my documents as well as my bank. It is very versatile.” 

Cash Still Counts 

Although UPI has emerged as a favourite for most users, cash is still not something that will be out of fashion completely. There are parts of the country where cash still forms the core and particularly in villages, where the infrastructure of digitalisation might not be quite as effective. Many of the younger generations still maintain a little amount of cash in case of an emergency. 

“I do keep a few hundred rupees with me, but it’s more for peace of mind. I have rarely had to use it because UPI is widely accepted. Still, there’s a feeling that cash could come in handy, especially if there’s a network issue,” says Neha Jain, a 26-year-old graphic designer based in Jaipur. 

However, in cities, cash has become the secondary means of transacting for most Gen Z and millennials. Indeed, the transformation can be deemed somewhat of a generational switch since digital convenience and speed seem to outweigh tangible benefits of carrying physical currency. 

We spoke to a few Gen Z and millennials in a few cities across India, and this is what they said. 

“For me, UPI is quicker and cleaner. I can pay anyone anytime without looking for ATMs or worrying about loose change,” says Priya Nair, 21, from Chennai. 

“Now, cash feels cumbersome. With UPI, I pay for tea on the roadside and cab rides without needing my wallet,” says Aditya Sharma, 28, from Delhi. 

Kavya Raj, a 23-year-old architecture student in Delhi, said that he honestly doesn’t even remember the last time he used an ATM, everything he needs is in his phone. 

Some youngsters, however, still believe in keeping cash as a backup. “I prefer UPI but I keep cash as an emergency fund, in case there’s a network issue,” says Nikhil, 29, from Kolkata.

The Popularity Of UPI 

The government and the banking sector have played a very significant role in making UPI accessible and popular. Minuscule transaction costs even on small-value transfers make it attractive for daily use, and banks and financial tech firms regularly promote UPI-linked offers, making it an even more attractive option than cash for young users to choose UPI over it. 

Says Sahil Gupta, 19-year-old engineering student from Kolkata, “Many apps offer cashback and discounts on UPI payments, which I cannot get with cash. It’s a small reward, but it adds to the appeal.” 

Adds Ritu Yadav, 25, from Jaipur: “I hardly use cash anymore and UPI has become my synonym for payment.” 

Considering that the preference for UPI has gone up to an all-time high, it is pretty obvious that the digital mode is here to stay. All from convenience to rewards, the benefits of UPI have aligned perfectly with the needs and habits of Gen Z and millennials. And, with these young Indians moving on to digital solutions in large numbers, the possibilities of India turning into an even more cashless society look brighter. 

As 22-year-old Aditi Rao puts it, “For me, UPI isn’t just an option. It’s the new cash.”