ONDC is going to be the UPI of e-commerce" has been repeated so often since 2022 that it's practically become the network's tagline. It's a useful shorthand — both are open, government-linked digital infrastructure built to break up closed platforms — but the comparison is often used more as a hope than an analysis. Worth actually pulling apart: where does the analogy hold up, and where does it quietly fall short?

The Numbers: Two Very Different Adoption Curves

• UPI crossed 1 crore (10 million) monthly transactions in June 2017, roughly a year after its 2016 launch — and by 2026 has scaled to over 22-23 billion transactions a month, or more than 700 million transactions a day.

• ONDC, launched in 2022, crossed a comparable milestone of roughly 99 lakh (9.9 million) monthly transactions only in June 2024 — meaning it took ONDC longer to reach a milestone UPI hit within its first year.

• More recent reporting puts ONDC's network at over 350 million cumulative transactions and roughly 12 lakh (1.2 million) transactions a day in some accounts — meaningful growth, but still a different order of magnitude from UPI's daily volume.

None of this means ONDC has failed to gain traction — digital commerce adoption was always going to be slower than payments adoption, for reasons that go beyond execution. But the gap is real enough that the "UPI moment" framing deserves a closer look rather than being taken at face value.

Where the Comparison Genuinely Holds Up

• Both are protocols, not platforms — UPI doesn't own your bank account, and ONDC doesn't own the sellers or buyer apps on its network; each simply defines a shared standard that independent players build on top of

• Both aim to unbundle a previously closed value chain — UPI separated payment initiation from any single bank's app, the same way ONDC separates discovery, ordering, and fulfillment from any single marketplace's app

• Both are structured as public digital infrastructure (DPI) rather than a private company's product, with the explicit policy goal of lowering costs and expanding access for smaller players who couldn't compete on closed platforms

• Both rely on the same basic mechanic — a shared, government-linked protocol that any compliant participant can build on without needing bilateral deals with every other participant

Where the Comparison Breaks Down

• Money is a single, standardized unit. A rupee is a rupee, regardless of which bank sends or receives it — there's no "quality" or "condition" to verify. A product is not standardized in the same way: two listings for the "same" item can differ in quality, packaging, freshness, or accuracy, which UPI simply never had to solve for

• Payments end in seconds; commerce doesn't. A UPI transaction completes and is done. An e-commerce order involves inventory accuracy, delivery logistics, potential returns, and days of fulfillment risk — a fundamentally longer and more failure-prone chain than moving money

• UPI had direct regulatory backing from RBI as the banking regulator from the outset, which gave every bank strong incentive to comply quickly. ONDC, initiated by DPIIT rather than a sector regulator with direct authority over e-commerce platforms, has had to build adoption more through voluntary participation and incentive than regulatory mandate

• Early pricing data hasn't always supported the "cheaper by default" narrative — a JM Financial analysis during ONDC's pilot phase found food and grocery items listed on ONDC were sometimes priced similarly to or higher than equivalent listings on Zomato, a reminder that lower commissions don't automatically guarantee lower prices in every case or category

ONDC vs UPI

Why the Adoption Gap Isn't Necessarily a Failure

E-commerce in India was still only an estimated 3-4% of total retail when ONDC launched — a much smaller base to build urgency around compared to digital payments, which had an obvious post-demonetization push behind it in 2016. ONDC's slower ramp reflects a genuinely harder problem — coordinating catalogs, logistics, and trust across categories — not simply weaker execution. It's also still early: UPI itself took roughly six years to become the dominant payment method it is today, and ONDC, launched in 2022, is still within that same early window. For buyers wondering whether ONDC prices are actually lower right now, or how the network's grievance and trust systems work, the honest answer is that both have matured significantly since ONDC's early pilot phase.

Frequently Asked Questions

Is ONDC run by the same organization as UPI?

No — UPI is managed by the National Payments Corporation of India (NPCI), established by RBI and the Indian Banks' Association, while ONDC was initiated by India's Department for Promotion of Industry and Internal Trade (DPIIT) as a separate, not-for-profit entity.

Has ONDC grown as fast as UPI did?

Not at the same pace — UPI reached 1 crore monthly transactions within about a year of launch, while ONDC took until mid-2024, roughly two years after its 2022 launch, to reach a comparable milestone.

Why is e-commerce harder to standardize than payments?

Payments move a single standardized unit — money — while e-commerce involves physical goods with variable quality, inventory accuracy, delivery logistics, and returns, all of which introduce complexity that a payment transaction simply doesn't have.

Does ONDC guarantee lower prices the way UPI guarantees free-ish transfers?

No — pricing on ONDC still depends on individual sellers, and early data during the pilot phase showed prices weren't always lower than closed platforms; the network creates the conditions for lower prices through reduced commissions, but doesn't guarantee it on every listing.

Could ONDC eventually reach UPI-level adoption?

It's plausible given similar underlying design principles, but the comparison has real limits — e-commerce's operational complexity and ONDC's more gradual regulatory backing mean it's likely to follow a slower, longer adoption curve than UPI did.

The Honest Takeaway

ONDC and UPI share a real, meaningful design philosophy — open protocols over closed platforms — and that's worth taking seriously. But treating ONDC as simply "UPI, but for shopping" undersells how much harder the underlying problem is. The comparison is a useful lens, not a guarantee of the same outcome.

About Costbo

Founded by Mr. Eswar and Mr. Ananth, with nearly 20 years of technology experience, Costbo is a leading ONDC seller platform powering India’s open digital commerce ecosystem. Costbo is among the first ONDC 1.2.0 certified seller platforms, enabling brands and sellers to sell on ONDC with fast onboarding, lower costs, and full operational control.

Ready to grow on ONDC? Start your journey with Costbo today.

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References

• What will it take for ONDC to be the UPI moment for commerce? — LinkedIn / Gaurav Mittal

• ONDC's Reality Check — Inc42

• ONDC touches ~1 crore transactions a month – A UPI Moment in Digital Commerce?

• Digital Paradox - UPI won, But ONDC, OCEN, ULI struggling — Chai and Charts

• A UPI Moment for E-Commerce — Capital Calculus

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