Over 550 mn UPI users, 69 mn MF investors and 50 mn stock buyers — why are millions still not investing? Report decodes

India's digital financial ecosystem has expanded rapidly, putting the convenience of instant payments within reach of hundreds of millions of people. However, access to these services has not yet translated into equally widespread participation in wealth-building products such as equities and mutual funds.

A recent EY India report highlights this disparity clearly, as it noted that India has more than 550 million people active UPI (unified payments interface) users, compared with around 62 million individuals investing in mutual funds and nearly 50 million actively participating in equity markets.

The figures, the report says, points to an evident gap between access to digital financial services and participation in long-term investments. Digital payments have made it increasingly easier to invest in mutual funds and stocks, as everything is just a click away.

Why millions remain outside investment ecosystem?

According to the company's report, which detailed investor behaviour in India, the gap is no longer primarily about access to financial infrastructure.

"Many households are financially connected, economically capable and digitally active, but remain under-invested because market-linked products feel complex, volatile, unfamiliar or difficult to evaluate,” it states.

Limited access to trusted advice and guidance suited to their financial goals and risk appetite can also make potential investors hesitant to take the first step towards equities and mutual funds, the report added.

How DPI, AI could widen investment participation

India's digital public infrastructure (DPI) Infrastructure has already transformed the economics of financial inclusion by making identity verification, digital payments and financial data sharing easier, EY said in the report.

Aadhaar, UPI and Account Aggregator have created the digital rails that can now be extended to investing, with simpler onboarding, recurring investment options, consent-based data sharing and integrated services.

On top of that, artificial intelligence could add an advice layer to this infrastructure by using customer data to provide more personalised goals, recommendations and explanations at scale.

The report argues that the focus should move beyond simply making investing easier or faster towards making it easier to understand, suitable and sustanaible, while maintaining transparency and investor protection.

“The implications for financial institutions are profound. Product-led growth must evolve into outcome-led participation. Digital access must become guided access. Investor education must move beyond awareness and toward measurable financial capability. Advice must be industrialized while preserving suitability, transparency and trust. Winning institutions should not simply distribute more products; they should help customers make better financial decisions and remain invested throughout market cycles,” the report added.

Use of UPI continues to grow, even across borders

UPI recorded 24.07 billion transactions in September, compared with 24.51 billion transactions in August. Despite the monthly dip, UPI transaction volume grew 23% year-on-year, highlighting the continued expansion of digital payments in the country.

But UPI usage is not longer limited to India. It has expanded its global footprint, with the real-time payments platform now accepted in 11 other countries.

Greece and the Maldives are the latest nations to adopt UPI, according to a statement issued by the Press Information Bureau (PIB). The other places where UPI is accepted include Cambodia, Bhutan, Nepal, Singapore, the United Arab Emirates (UAE), France, Sri Lanka, Mauritius and Qatar.