The increase due to demonetization cancelled out afterwards. The grown we see now came organically, later

Demonetization induced usage reduced once cash was back in circulation. It was COVID era fear of touching cash and compulsion of lockdowns that really made digital payments hit the stratosphere.

Pre COVID transcations per month stood at 1.5b and now at 8.5B.

COVID might have convinced few people that's all.

Demonetization's effect is not clear since UPI came out just a year before Demonetization took place.

It took off because of young generation and costs nothing as simple as that. They forced businesses and other to embrace it.

Fun fact, i have been using UPI ever since it came out and used to pay for coconut/veggies with it even back in 2017

Curious about your math that equates 7 billion transactions per month to a "few people." That's a relative increase of more than 400%. I think you could argue that we were already on that trajectory, but it sure looks (to me) like Covid accelerated things, which matches my anecdotal experience.

At the end of the day, nothing beats convenience. If the tech and the ecosystem was the same as it is today, it would have found adoption even without demonetization.