The number of debit cards in circulation reached over 1.04 billion in FY26 and is projected to grow only marginally to around 1.13 billion by FY31, a compound annual growth rate of just 1-2%. The report attributes this continued issuance largely to debit cards being bundled by default with new savings and current accounts, which remain a key source of low-cost deposits for banks.
Even as the card base keeps growing, transaction volumes have fallen sharply. Debit card transaction volume dropped from 1,614 million in FY25 to 1,280 million in FY26, and PwC projects it will decline further to 851 million by FY31. Over the past three years, volumes have fallen at a compound annual rate of 26-28%, a trend the report expects to persist.
The average number of transactions per card has collapsed from about 4.5 in FY21 to roughly 1.2 in FY26, and is expected to fall further to about 0.8 by FY30-31. Annual spending per card is projected to shrink from around ₹4,200 in FY26 to about ₹3,000 by FY31.
Transaction value has also declined, though more slowly than volume — from about ₹4,455 billion in FY26 to a projected ₹3,417 billion by FY31. Because value is falling less steeply than volume, the average ticket size on debit cards has risen sharply, from ₹1,647 in FY21 to ₹3,480 in FY26, and is projected to reach about ₹4,000 by FY31.
“The rise in ATS is indicative of debit cards being increasingly used for higher-value, necessity-driven transactions, while lower-value, high-frequency payments have largely migrated to UPI,” the report says.
PwC identifies the Unified Payments Interface (UPI) as the primary driver of the decline, citing zero MDR, a seamless user experience and near-universal merchant acceptance as reasons UPI has structurally replaced debit cards for everyday, low-value payments. UPI-enabled cardless cash withdrawals are also reducing dependence on debit cards for ATM access, the report notes, with ATM withdrawal volumes falling roughly 11% between March 2023 and March 2026.
Despite the decline in payment usage, the report says debit cards remain critical to the digital banking ecosystem in a different role: as an authentication instrument. For many banks, debit card credentials remain the primary method for activating UPI, setting or resetting UPI PINs, and registering for mobile and net banking services, meaning debit card issuance continues to grow even as spending on the cards stagnates.
Debit cards continue to see some resilience in specific segments, including higher-value transactions where consumers face UPI limits, online purchases where users prefer to avoid exposing credit card details, and international transactions among travellers without credit cards.
Debit card revenue, drawn from interchange income, card fees, ATM and service charges, and partnership income, is projected to decline from ₹37 billion in FY25 to about ₹26 billion by FY31, the report shows.
Also read: India consults banks, payment firms on fees for large UPI payments, Reuters reports
