Rewards and Cashback Become Key Factor in Choosing UPI Payment Apps

India’s Unified Payments Interface has transformed digital payments, but a new study suggests that attractive rewards and cashback offers are now playing an even bigger role in how users choose their preferred payment app. As competition among UPI platforms intensifies, retaining existing users is becoming more important than simply acquiring new ones.

According to a report released by Empower India, 89 percent of UPI users consider rewards and cashback before selecting a payment app. The research also found that 83 percent of users are willing to switch to another platform if it provides better rewards, while 94 percent say incentives are the biggest reason behind changing apps. Around 88 percent actively compare different UPI applications to find the best available offers.

These findings indicate that rewards are no longer viewed as temporary promotional campaigns. Instead, they have become an important factor influencing everyday payment decisions and long term customer loyalty.

Customer retention emerges as the next challenge

The study suggests that the next phase of UPI growth will depend less on attracting first time users and more on keeping existing customers engaged. With switching between apps requiring little effort, payment companies must deliver consistent value beyond basic payment services.

Among users who changed their preferred UPI platform, 59 percent cited poor rewards and benefits as the main reason for leaving. Other factors included ease of use at 64 percent, trust and customer support at 61 percent, and payment convenience at 28 percent. The report highlights that meaningful incentives have become a major tool for improving customer retention.

Empower India Director General K Giri said India has built one of the world’s strongest real time payment infrastructures. However, he noted that future growth will be driven by continued user engagement rather than new registrations. He added that customers now expect visible value from every transaction, making rewards an essential part of the overall digital payment experience.

Amazon Pay records highest customer satisfaction

The survey also compared user satisfaction across major UPI platforms based on rewards and overall experience.

Amazon Pay received the highest satisfaction rating, with 74 percent of its users saying they were highly satisfied with the rewards offered. Google Pay and Paytm followed closely in overall customer satisfaction.

Amazon Pay also stood out for delivering everyday value, with 87 percent of its users saying rewards and cashback were a major reason for using the platform. About 73 percent of Google Pay users also preferred the app because of its reward programmes.

For cashback on daily payments, 50 percent of Amazon Pay users identified it as the biggest attraction, compared with 38 percent for PhonePe and 35 percent for Google Pay.

When it came to redeeming rewards easily, Google Pay led the category with approval from 70 percent of users, while PhonePe and Amazon Pay were close behind at 68 percent. PhonePe and Google Pay also performed strongly in user trust and security, while Paytm earned positive feedback for ease of use.

UPI ecosystem enters a mature phase

The report concludes that India’s UPI ecosystem has reached a new level of maturity. Core features such as payment speed, security, reliability and widespread QR code acceptance are no longer major differentiators because users now expect them as standard services.

As technical differences between platforms continue to narrow, companies will increasingly compete by delivering meaningful rewards, better customer experiences and consistent everyday financial value. The ability to retain loyal users through long term engagement is expected to define the next chapter of India’s rapidly expanding digital payments landscape.