Role Of Unified Payments Interface On The Digital Payment Landscape In India

Here’s a detailed understanding of the Unified Payments Interface

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The Unified Payments Interface is also known as UPI. It's utilised to move cash between financial balances through one single application. This means that through UPI features, you can send and receive money, pay bills, and authorise payments all in one place on the same interface in a single step.

Any digital payment using UPI ends up making the entire process of conducting online transactions easier.

Also Read: What Is UPI And How Does It Work?

The many benefits of UPI

When you switch to a new method of doing things, you look for substantial reasons to do that. So here, we’ll list some of the benefits of UPI that will help you make an informed decision.

• Universal Application: The universal application simplifies transactions with just one click.
• Enhanced Security: The two-factor authentication provides an extra layer of security, ensuring a safer transaction environment.
• Easy Transactions: With a user-friendly interface and simple UPI features, you can make effortless transactions.

Also Read: Which Mode Of Payment Is Better NFC Or UPI?

When did UPI enter the digital payment landscape in India?

The National Payment Corporation of India (NPCI) was established in April 2009 to combine all digital payment transactions in India.

In 2012, a vision statement for the RBI's next four years stated that it wanted to create settlement and payment systems that were reliable, helpful, accessible, open, and authorised in India. As a result, the Unified Payments Interface was finally launched in 2016.

In India, the Unified Payments Interface (UPI) noted one of the highest at 8.7 billion transactions in March 2023, as per the National Payments Corporation of India (NPCI). UPI payments are expected to contribute an additional $45.6 billion, or 1.12%, to India's GDP by 2026. Records and projections point to the impact of UPI on economic growth.

Progress of UPI in the digital payment landscape in India

UPI has not only impacted the country's economic growth, but has also caused a change in the digital environment. One example is seeing a UPI QR code at different shops and with other vendors. It’s like you hardly need to carry cash anymore.

On the other hand, the total value of digital transactions accounted for around 8,840 billion in FY 2021-2022, with 87.2% of current and savings accounts seeded with an Aadhaar number and 81.05% with a mobile number. Not only that, the availability and expansion of the Unified Payments Interface outside India is another proof.

In addition to Singapore, the United Arab Emirates, Oman, Saudi Arabia, Malaysia, France, the BENELUX markets (Belgium, the Netherlands, and Luxembourg), and Switzerland have Indian digital payment systems including UPI and RuPay.

The Unified Payments Interface has brought a significant shift in the digital payment system of India. It’s important to note that it benefits both banks and vendors. In this article, we list those and a basic understanding of their impact on the digital payment landscape in India.