UPI Fuels Unexpected Boom: Cigarette Shops Lead Digital Payments Surge in India

• Cigarette shops have become unexpected beneficiaries of India's digital payments boom via UPI.
• Transaction volumes at tobacco outlets grew over eightfold between November 2023 and November 2025, the fastest among major consumption categories.
• UPI's overall transaction volumes nearly doubled, driven by daily-use categories like groceries and fast-food.
• Cigarette shops' share of total UPI transactions quadrupled from 0.66% to 2.76% in the same period.
• Average UPI transaction value at cigarette shops dropped from Rs 81 to Rs 60, indicating a shift of micro-payments to digital.

Why It Matters: UPI is transforming India's micro-payment landscape, making even small purchases digital, with cigarette shops leading the charge.