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.
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