Cigarette Shops Emerge As Unlikely Winners In India’s UPI Boom

Updated: December 29, 2025 16:01

Image Source: MoneyControl

India’s digital payments revolution has found an unexpected beneficiary: cigarette shops. With UPI transactions surging across low-value purchases, tobacco kiosks have recorded the fastest growth in transaction volumes, rising eightfold between November 2023 and November 2025. This reflects how habit-driven spending is reshaping the digital payments landscape.

India’s Unified Payments Interface (UPI) continues to redefine consumer behavior, embedding itself into everyday purchases. While grocery stores, pharmacies, and fuel stations have long been central to UPI adoption, cigarette shops have now emerged as surprising leaders in transaction growth. The rise of tobacco kiosks as digital payment hubs highlights how even small, habit-driven purchases are being transformed by India’s cashless economy.

Key highlights from the announcement include

Transaction volumes at cigarette and tobacco outlets grew more than eightfold between November 2023 and November 2025.
This marks the fastest expansion among major consumption categories tracked under UPI adoption.
Overall UPI volumes nearly doubled in the same period, rising from 6.6 billion transactions in November 2023 to 12.8 billion in November 2025.
Habit-driven categories such as groceries, dairies, pharmacies, and fast-food outlets also saw strong growth, but cigarette shops outpaced them all.
The surge reflects how UPI has become embedded in low-value, routine spending, shifting consumer preference from cash to digital.
Experts note that the convenience of QR codes and instant payments has made even small-ticket transactions seamless.
The trend underscores UPI’s role in expanding financial inclusion by digitizing everyday consumption.
Industry observers believe this shift could reshape retail dynamics, with kiosks and micro-merchants becoming central to India’s digital economy.
The rise of cigarette shops as digital payment leaders highlights the cultural and behavioral impact of UPI adoption.
The broader ecosystem shows peer-to-merchant payments now outpacing peer-to-peer transfers, driven by retail categories.

The unexpected rise of cigarette shops as digital payment leaders illustrates the depth of India’s UPI revolution. By embedding itself into daily, low-value transactions, UPI has transformed not just how people pay but also where digital money flows. This evolution signals a new phase in India’s cashless journey, where even the smallest purchases are digitized.

Sources: Moneycontrol, CNBC TV18, NewsBytes

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