The government is allegedly considering a plan to reinstate the Merchant Discount Rate (MDR) on Unified Payments Interface (UPI) transactions over INR 3,000 in an effort to relieve financial strain on banks and payment service providers.
As per various media reports, the action is intended to address the operational and infrastructure expenses associated with high-value digital payments.
In order to distinguish high-value payments from low-value ones, current debates propose a change from the current framework by tying MDR to transaction value as opposed to merchant turnover.
The zero-MDR framework that has been in effect since January 2020 may come to an end as a result of this modification.
According to a media report, larger transactions may soon be subject to a merchant charge, reverting the zero-MDR policy that has been in effect since January 2020, even if small-ticket UPI payments will probably continue to be free.
From Zero to Generating Revenue Though MDR
In India, UPI currently controls about 80% of all retail digital transactions. However, banks and payment providers have voiced worries about sustainability and escalating costs since the zero-MDR regime does not produce any money from high-value transactions.
Many people think that the lack of MDR has tempered interest in making additional investments in digital infrastructure.
According to a media article, the Payments Council of India has responded by recommending a 0.3% MDR on big merchants for UPI transactions in order to support the upkeep and expansion of the digital payments ecosystem.
RuPay Will Continue to Enjoy the Benefits
RuPay cards are mostly not included in the current MDR price system, which ranges from 0.9% to 2% for debit and credit card transactions. If the new MDR structure is put into place, RuPay credit cards might still be excluded.
For the time being, RuPay credit cards are anticipated to continue to be excluded from the Merchant Discount Rate. After speaking with important parties, including banks, fintech firms, and the National Payments Corporation of India (NPCI), government representatives said a final decision might be made in one to two months.
The report also stated that if the change were to be put into effect, it would signify a strategic pivot from encouraging broad use to guaranteeing the financial viability of India’s digital payment systems.
This is the most recent turn of events; earlier this year, the Payment Council of India had prompted the government of Prime Minister Narendra Modi to reevaluate its Zero MDR policy on UPI transactions.
A media outlet last week had predicted that the digital payments network will soon surpass the daily transaction volume of the multinational payments giant Visa, making it the world’s largest retail interbank payment settlement platform.
UPI had 644 million transactions as of June 1 and 650 million the following day. In FY24, Visa handled an average of 639 million transactions every day.
No MDR on UPI, Confirms Finance Ministry
The government reportedly plans to impose a merchant discount rate (MDR) on expensive UPI transactions, although the Union Finance Ministry denied this. The ministry described the reports as “false and baseless” in a statement. In a post on X, the ministry stated that rumours and assertions that the MDR will be billed for UPI transactions are wholly untrue, unfounded, and deceptive.
Ministry further stated that nation’s people are unnecessarily apprehensive, afraid, and suspicious as a result of such sensational and unfounded rumours. The government is still totally committed to encouraging digital payments through UPI, the message went on to say.
The reply follows reports from a few media publications that the government intends to support banks and payment solution providers by imposing MDR on transactions valued at INR 3,000 and above.
The government might allow lenders to impose MDR on transaction value rather than merchant turnover, according to the reports. The Payment Council of India had called on the government of Prime Minister Narendra Modi earlier this year to reevaluate the Zero MDR rule for UPI transactions.
The UPI limit for tax payments has been suggested to be raised from INR 1 lakh to INR 5 lakh by the Reserve Bank of India (RBI). The increase in the cap will allow taxpayers to swiftly settle their increased tax obligations. In most cases, there are no extra fees associated with payments made using UPI. This does not apply when paying taxes using a debit or credit card. There has been a prior instance of the RBI raising the cap. The central bank increased the ceiling on some payments, like those to hospitals and schools, to 5 lakh rupees in December 2023.
There is a limit of up to INR 1 lakh per transaction for conventional UPI, according to NPCI. The maximum transaction limit for certain UPI categories is 2 lakh, while for IPOs and the Retail Direct Scheme, it is 5 lakh. Other categories include Capital Markets, Collections, Insurance, and Foreign Inward Remittances.
The Statement on Development and Regulatory Policies states that UPI has become the most preferred payment method because of its user-friendly characteristics. At this time, INR 1 lakh is the maximum amount that may be transferred using UPI. Periodically, the Reserve Bank reviews and enhances the restrictions for a few categories based on the various use cases. These categories include capital markets, initial public offering subscriptions, loan collections, insurance, medical and educational services, and more. It has been determined to increase the ceiling for tax payments using UPI from INR 1 lakh to INR 5 lakh per transaction since both direct and indirect tax payments are frequent, high-value, and prevalent. “
The Impact of the New Limit on People’s Ability to Pay Taxes
During a fiscal year, a person must pay their income tax, property tax, advance tax, and other related taxes. Depending on one’s income, the tax amount can be higher. It will be easier to pay both direct and indirect taxes with the increased UPI limit.
This is because a user needs an active bank account, a mobile number associated with that account, and an app that supports UPI in order to make a transaction using UPI. After creating a UPI ID, users can pay using the app by inputting a 4- or 6-digit PIN.
Additional UPI Announcements
Not only has the RBI announced the implementation of delegated payments via UPI, but they have also raised the UPI ceiling for tax payments to INR 5 lakh. Delegated UPI payments would enable one user to authorise another user to use their bank account to establish a restriction on UPI transactions, according to the release.
Essentially, this means that one person can grant access to their bank account for UPI payments to another person, for example, a family member. It is believed that this product will increase the penetration and use of digital payments nationwide. Prompt and comprehensive instructions will be sent out soon.
The launch of UPI One World, an enhanced convenience and security digital wallet, has made traveling to India much easier for international travelers. Using this cutting-edge payment method, visitors worldwide may enjoy their time in India without dealing with complicated currency exchanges or carrying large amounts of cash.
The UPI One World wallet, which was first introduced during the G20 meeting that India hosted last year, is now available to more countries’ tourists. The app allows users to pay at merchant locations with the simple scan of QR codes, making it a hassle-free experience for tourists. Thanks to a joint effort by NPCI (National Payments Corporation of India), IDFC First Bank, and Transcorp International Limited, with the support of the Reserve Bank of India, unused balances can be returned to the original payment source in compliance with foreign exchange regulations.
“We are thrilled to offer the UPI experience to international guests visiting India through UPI One World. This move aims to enhance the visitor experience by equipping them with UPI, the most preferred payment choice among Indians. International travelers can manage their financial needs conveniently and transfer any unused balance back to the original payment source. By enabling foreign travelers to experience the real-time payment system developed by India, we are taking a significant stride towards creating a more interconnected global digital payments ecosystem,” an NPCI spokesperson commented to various media outlets.
UPI ONE WORLD
How Can Visitors Access the Wallet?
The UPI One World wallet, which may be obtained from authorized Prepaid Payment Instrument (PPI) issuers in various locations such as airports, hotels, and designated money exchanges, necessitates a comprehensive Know Your Customer process based on a valid passport and visa. The World Heritage Committee meeting will be held at Bharat Mandapam in New Delhi, and special arrangements are being made to distribute these wallets to the attendees there. Visitors can add funds to the wallet using cash or other payment methods once it’s been issued.
Upon exiting India, they will be able to return any remaining money to their source per foreign exchange restrictions.
The purpose of this program is to ease travel for tourists from other countries who are visiting India. By providing the flexibility and safety of the Unified Payments Interface (UPI), which is India’s most widely used digital payment system, tourists can enjoy their time in India without having to worry about managing cash or currency exchange.
The National Payments Corporation of India was formed in 2008 with the objective of integrating all payment mechanisms existing in the country and making them uniform for retail payments. However, the majority of the population was opting for cash payments as retailers encouraged this method. There was also the problem of almost half the population that had no access to any form of banking service. This also precipitated the issue of black or illegal money and corruption within the country.
By 2012, the RBI had envisioned building an authorized payment and settlement system that was safe, efficient, accessible, inclusive, and interoperable. This was done as a part of the Green Initiative and to encourage the lesser use of paper in the domestic payment market. UPI was officially launched in 2016 for public use.
The CEO of Netmagic Solutions says UPI has become one of the most successful deep-tech innovations coming out of India. It works on an interoperable four-pillar push-pull model. There is a beneficiary at the front end, the payment service provider, and a beneficiary back end bank that settles the monetary transaction for the users.
As it began to gain traction and prominence in 2019, the Ministry of Finance nullified the Merchant Discount Rate (MDR) on UPI which catapulted the number of low-value transactions, making huge gains on real-time transaction volume data.
From 1st January 2019, UPI became a popular payment option for IPOs. By March 2020, the transaction limit was increased from INR 1 lakh to INR 2 lakhs, which was again increased to INR 5 lakhs in December 2021 for Retail Direct Scheme and IPO applications.
In its first monetary policy of FY 2022-2023, RBI has proposed using a UPI-based QR code for a cardless cash withdrawal facility from ATMs. ToneTag launched VoiceSE, in partnership with NSDL Payments Bank and NPCI, which will enable users to make UPI payments using voice in Hindi, Tamil, Telugu, Malayalam, Kannada and Bengali language. In 2021, the value of UPI transactions was more than INR 73 lakh crores, recording a 110% rise from INR 33.87 lakh crores in 2020.
The Volume of UPI-Based Digital Payments Across India from FY17 to FY22
Within two years of its launch, by 16th August 2018, UPI 2.0 was launched enabling their users to link Overdraft accounts to a UPI handle. There was an added feature of the AutoPay facility for recurring payments, and users were able to pre-authorize transactions by issuing a mandate for a specific merchant. The newer version also included a feature to view and store the invoice for transactions.
By August 2021, Bank of Baroda, Paytm Payments Bank and State Bank of India were live on UPI AutoPay and registered 204,000, 186,000 and 660,000 mandates respectively. Plans were in place for NCPI to expand AutoPay to international markets and operationalize real-time payment dispute resolution covering 90% of complaints by September 2022.
RuPay credit cards were allowed to be linked with UPI from 8th June 2022. Currently, NPCI is working on a real-time feature that will reduce the time period taken by banks to unblock funds over time-out or transaction from 24 hours to 30 seconds.
Continuing the growth of UPI and its features, the RBI Governor launched UPI 123PAY on 8th March 2022, offering 4 payment options to UPI users:
App-based functionality where a mobile phone manufacturer can install a UPI app through over-the-programming that can be used for payment.
Missed calls through which customers can use a dedicated merchant payment number by giving a missed call. The incoming authentication call will ask for PIN verification to complete the transaction.
Interactive Voice Response (IVR) based where the payment transaction will complete using pre-defined phone numbers.
Payment in offline mode through sound-based proximity data communication.
On 17th November 2021, NPCI International Payments Limited signed an MoU with PPRO Financial, a UK-based financial services firm, to expand the acceptance of UPI into foreign markets, specifically in China and the US, which accounts for half of all transactions from India.
Onboarding of NRI/NRE Accounts
Earlier this month, the National Payments Corporation of India (NPCI) released a notice stating that Non-resident accounts like NRI/NRE accounts attached to international mobile numbers will be permitted to transact with UPI. To begin with, mobile numbers of ten countries will be enabled. These countries are Singapore, Australia, Canada, Hongkong, Oman, Qatar, United States of America, Saudi Arabia, United Arab Emirates and United Kingdom.
The NPCI, in its notice, has clarified that these accounts will be permitted to transact as long as the member banks ensure strict adherence to FEMA (Foreign Exchange Management Act) regulations and the guidelines issued by the RBI (Reserve Bank of India). All the UPI members including banks and payment platforms have been instructed by the NPCI to ensure that they are completely compliant to all the legalities by April 30, 2023.
Lauding this move, Rajsri Regan, Head of Development – Banking and Payments, India & Philippines, FIS said – “NPCI has been working to expand and boost the use of UPI across the world and this move will widen the use of digital payments as Indians living overseas will also be able to make instant transactions.” This facility will soon be extended to mobile numbers of other countries as well.
Will UPI Become a Paid Service?
The Ministry of Finance’s Tweet About UPI Services
The government had made transactions over UPI free of cost to encourage faster and deeper penetration of digital payments post demonetisation and especially, the pandemic. This is the government’s zero MDR (Merchant Discount Rate) framework in which neither the customers nor the merchants pay for utilizing UPI services.
However, in a discussion paper that RBI released in early August 2022, it said that as a fund transfer system bears a resemblance to the IMPS (Immediate Payment Service), the charges in UPI need to be similar to the charges that are applicable in IMPS for fund transfer transactions.
Furthermore, UPI service providers like PhonePe, Google Pay and Paytm Payments Bank have not earned any revenue for the last couple of years for their services. Industry executives are debating that with the setup and adoption of a robust digital payment infrastructure the time has come for them to earn revenue from these transactions so that more players are enticed to enter the UPI service space to build further financial inclusion.
The Finance Ministry has stepped in very recently and has tweeted – “UPI is a digital public good with immense convenience for the public and productivity gains for the economy. There is no consideration in Govt to levy any charges for UPI services. The concerns of the service providers for cost recovery have to be met through other means.”
UPI payment platforms like Google Pay and Paytm have amassed millions of active users and have a deep data mine to access to fine-tune their products. Also, they have other avenues for revenue building. The payment platforms earn a commission from the service provider whenever there is a bill payment for utilities like electricity and water as well as mobile recharges and DTH recharge payments. To these payment platforms data substitutes for revenue to a certain extent.
In the immediate future, it remains unlikely that UPI will become a paid service.
Conclusion
The penetration and adoption of UPI continues to grow as the service itself seeks to grow and expand to include more and more features. While the future is bright for the UPI platform, it will be a wait-and-watch game to see whether the service in the future might attract charges or not.
FAQs
What is UPI?
UPI stands for Unified Payments System. It is a system developed by the National Payments Corporation of India that supports multiple bank accounts in a single mobile application. It facilitates inter-bank, peer-to-peer, and person-to-merchant transactions.
Will UPI become a paid service?
There has been suspicion among the people that there may be the possibility of UPI transactions carrying a service charge. However, to clear people’s suspicion, the Finance Ministry recently made a tweet saying that there is no consideration in Govt to levy any charges for UPI services.
The unified payments interface is the buzzword for the pandemic year. Ever since the pandemic hit, people became scared of touching any surface in the world. This was the time when the UPI came to the rescue. UPI or the unified payments interface is a method or gateway that is capable of transferring money from one bank to the other. This is a life saviour in a country like India. We are a country of more than a billion people and everyone has to do certain basic transactions everyday.
With so many transactions happening all over the country, it becomes hard and inconvenient. UPI eases just that thing. It lets you pay directly from your bank and you don’t have to carry notes and currency of small denominations and even larger denominations. In all its sense, UPI was a game-changer in India. It is fast, safe, easy and convenient.
There was however some issue over the UPI case in India. You cannot transfer money outside the borders of India. For that, you will have to follow some other method of transaction. In recent news, it was announced that Nepal (India’s neighbour) will accept the UPI payments from India. In fact, it will be the first country that will adopt the UPI system that India has inbuilt in itself. This step will be playing a pivotal role in transforming digital work all over the place, in India and as well as in Nepal. It was officially announced by the NPCI on Thursday, last week.
NPCI stands for National payments corporation of India. Here we will be discussing Nepal, which is India’s friend and all in all aspects. In this article, we will also discuss what will be the after-effects of this news. How will the fintech startups change, will this be a better move for them or will the move give them a hard time. Let us see first how the UPI works, and why it is so widely used.
A Small Brief About the Unified Payments Interface
We have invented so much, achieved so much and we are still in the process of innovating and adding value to the world. However, any amount of technology in the world is of no use, if it cannot ease the life of humans. Because what’s the matter if tech is useless? When the population rises to a great extent, something has to be invented which will work efficiently in managing human affairs.
In fact, as the population of the world rises, there has to be something that holds the number of transactions happening everywhere. This is when the word digital payment came into the picture. It is a mode of payment that is made via Digital means. Real money is flown out of a payer’s bank and is credited to the receiver’s bank. This is also a fast, easy and secure method to transact.
In a country like India, where the population bubble is so huge, it becomes crucial to innovate in the medium of transactions. This is when the word UPI comes to place. There is a strong possibility that someone has not heard of this word beforehand.
UPI or Unified Payment Interface is a digital payments service that costs nothing to the payer and receiver but makes it easy for both parties. It is a payments service and as the name suggests, it is a pathway through which money can be transferred to anyone in India.
It is the most accepted digital payments method. Since the demonetisation and the covid 19 pandemic, the use cases of UPI has also risen many folds. Which makes it the perfect go-to pathway for any sort of transaction.
It is developed by NPCI, which stands for National Payments Corporation of India. It is safe and secure as it is regulated by the Reserve Bank of India. RBI is the Apex bank in India, which is also the central bank of India. It regulates and secures every UPI transaction happening in the country. It is secure in this manner.
Another thing is that UPI is simple and convenient. All it takes is a mobile number and a bank account. It connects with your email id which is used to make a VPA ID. VPA is a virtual payments address.
As the name suggests, it is the online address to which payments are directed or payments are taken. VPA is something that directs the payment/transaction path. Transfers can be inter-bank and they can also be intra-bank. A mobile number also works seamlessly in the UPI payment system, if it is attached/linked with the bank account of the sender or receiver.
There are many benefits for a service like the UPI. But however, there is one limit to a UPI transaction. You cannot do a UPI payment across borders as it is only available in India. In recent news, something striking happened. It was reported that Nepal will be accepting the UPI structure of India. It is such a great welcoming move by which people can transact even in Nepal from a UPI enabled app. Let us see what is the news and what will be its implications.
India Nepal UPI Collaboration
In recent news, it was announced that Nepal will be accepting UPI which is a great initiative for development in both the countries, India and Nepal. In fact, it will become the first country to do this. The country said that they want to adopt India’s payment gateway for growing together.
NCPI has also given a nod to this agreement. Its foreign wing has joined hands with another technology entity to provide services in Nepal. The work of providing the infrastructure for this facility will begin soon in time.
NPCI International, Gateway Payment Service, and Manam Infotech, all three trifectas have come together and joined hands to deploy UPI solutions in Nepal. NPCI International Payments Ltd (NIPL) is all set to Enable NPCI’s flagship Unified Payments Interface(UPI) platform in Nepal.
This partnership or collaboration will enable many developments, like the creation of a real-time payments system in Nepal, leveraging NPCI’s top of the line or state of the art technology to democratise payments and displace cash
NCPI has come together and joined hands with GPS and Manam Infotech to provide services relating to the Unified Payments Interface to the country of Nepal. GPS here stands for Gateway Payments Services and Manam is a famous tech company on the land of Nepal. It has been clearly stated that GPS or Gateway payment service will be responsible for acting as a system operator for payments in Nepal.
Manam infotech will add the Unified Payments Interface to the whole country. It is a divided work and with the joint efforts of the respected bodies, this work will be done in an effective manner.
The collaboration will also make for the larger digital public good in Nepal. This effort on both ends will improve real-time person-to-person which is called P2P and person-to-merchant which is P2M transactions in the neighbouring country, NPCI said in a statement.
There have been rising sentiments of all the people who see UPI as a great initiative in a digital world. With Nepal joining hands with India, this will boost the usage of UPI and it will also promote the digital economy which everyone today strives to become. Moreover, this broad use of UPI will also bring these two countries together in the same sphere of payments.
As merchants and consumers from both countries will get benefits from this collaboration. Payments can be received and accepted from both countries which will make trade and communication easier on both ends of the locations.
With collaboration with Nepal, we can achieve a greater goal of merging the two economies, not exactly but the magnitude will rise in both places. As the collaboration will start working, it will also be seen that person to person and person to merchant transactions will also improve the number of countries. National payments corporation of India and investors and merchants are all looking forward to all the doors of opportunities that will be open after this collaboration on UPI.
National payments corporation and NIPL (International payments limited) which is its foreign wing, was incorporated in April 2020. The NIPL is a wholly-owned subsidiary of the national payments corporation of India. The sole purpose of NPCI is to regulate all the UPI payments in India.
Everything that is related to the Unified payment interface in India is to be managed by this entity. The foreign department of NPCI is known as NIPL and operates in connecting UPI outside Indian borders. The purpose of NIPL is to employ a payment system that is real-time, with the international markets. It has also the work of card schemes and RuPay which works outside Indian borders.
NPCI or the national payments corporation of India has developed and proved its capabilities in the past. It is the organisation that has the majority stakes in working overtime with the UPI in India.
The widespread usage of the Unified payments interface would not be possible, had it not been with the NPCI. Thus, this body has been the worthy organisation to regulate and promote UPI in Indian markets. The international wing of NPCI has also done immense work in its designated part. NIPL is focused on transforming payments across the globe with the use of technology and innovation
Nepal has a population of about 30 million (3 crore) with around 45 per cent banked. Mobile penetration of over 135 per cent with 65 percent of the population using smartphones provides a bedrock for seamless replication of the digital revolution in India to be replicated in Nepal, NPCI said.
NPCI International, Gateway Payment Service, and Manam Infotech. The trifecta has come to deploy UPI solutions in Nepal. This partnership or collaboration will enable many consequences, like the creation of a real-time payments system in Nepal, leveraging NPCI’s top of the line or state of the art technology to democratise payments and displace cash. NPCI International Payments Ltd (NIPL) is all set to Enable NPCI’s flagship Unified Payments Interface(UPI) platform in Nepal.
Conversely, several countries want to establish a ‘real-time payment system’ or ‘domestic card scheme’ in their own country. NIPL, with its knowledge and experience, can offer these countries technological assistance through licensing, consulting for building real-time payment systems to meet the rapidly evolving need of fast-growing global businesses. It will not only enable payment for Indians but also uplift other countries by enhancing their payment capabilities through technological assistance, consulting, and infrastructure.
As mentioned before, NPCI is the governing body when it comes to any case related to UPI. NPCI stands for National payments corporation India. In this case, when Nepal is agreeing to add UPI in their country, NPCI has to nod. To this query, it is amazing to see that NPCI has agreed to the partnership which will improve payments in both geographies. The foreign/international wing of the national payments corporation of India has cleared any issues related to the collaborations.
NIPL which is National international payments Ltd, which is the foreign department of the National payments corporation of India has joined with some organisations to provide UPI to the international market. In this case, where Nepal will become the first-ever country to get the UPI as their payments gateway, NIPL has planned everything which they will be needing.
They have joined two other entities to fulfil their mission of enabling UPI in Nepal. The two bodies are the GPS and Manam. GPS stands for gateway payments service and the other entity is Manam Infotech. Enabling the Unified Payments Interface in Nepal, which is not an easy task, requires a lot of work and efficiency. These two entities with which the NIPL has collaborated, are well versed with the world of UPI and how it operates.
Gateway Payments Service will be the payment system operator in Nepal. The other company, that is Manam Infotech will be responsible for employing Unified Payments Interface in the neighbour to India.
The collaboration will serve the larger digital public good in Nepal and bolster interoperable real-time person-to-person (P2P) and person-to-merchant (P2M) transactions in the neighbouring country, NPCI said in a statement.
“Nepal shall be the first country outside of India to adopt UPI as the payments platform driving the digitalization of cash transactions and furthering the vision and objectives of the Nepal Government and Nepal Rastra Bank as the Central bank,” it said.
This collaboration will enable the last-mile consumers in Nepal to reap the benefits of an open interoperable payments system driving immediate payment transfers between bank accounts and merchant payments in real-time.
Among all the news of Nepal accepting Unified payment interface as their go-to transacting pathway, one entity is in charge of the settings. You guessed it right, it is Manam Infotech private limited.
Manam infotech will be the responsible body for enabling UPI technology and operations in India. It will work very closely and parallel to the GPS. GPS or Gateway payments service is the service that is entrusted with the responsibility of maintaining the pathway.
Nepal shall be the first country outside of India to adopt UPI as the payments platform driving the digitalisation of cash transactions and furthering the vision and objectives of the Nepal Government and Nepal Rastra Bank as the Central bank.
“Manam has always been part of major digital transformation across the various regions of the world, we believe this partnership will eliminate all the barriers of payment transformation within Nepal and across the border thereby transforming the regional economy,” Naga Babu Ramineni, Director of Manam said.
Manam Infotech Private Limited is a very repeated name in the article and it is worthy to be named many times. Manam Infotech is a Fintech (Finance plus technology) company based out of Bangalore, India.
Manam Infotech is the fintech arm for many leading banks across various regions. The regions in which Manam infotech works fabulously includes Asia, Africa and the Middle East. The company stands tall with over a decade of experience in digital wallets, payments, and all the omnipresent banking and digital lending. Manam Infotech has also been a part of transforming the traditional banks to digital-first banks, which was the primary focus of the government for a long time now.
What is the Gateway Payment Service (GPS)?
Another name that we have repeated in this article is GPS or the gateway payment service. GPS is a payment system operator with expertise in all the works relating to payment services and operators. It is to its core a PSO or a payment system operator.
It is licensed by NRB, which stands for Nepal Rastra Bank, which is the apex bank in the country (Central Bank of Nepal). It has been allowed a PSO licence which enables the entity to work and operate in all sorts of payment and transaction settlement-related technology.
GPS has all the rights that include all that of payment gateway, domestic and international gateway, with UPI, that is unified payments interface in switch and in card transactions.
Benefits of UPI collaboration in Nepal
The benefits that this collaboration entails are endless. The collaboration will help people build real-time money connections with the country without having to go through the hassle of other payment methods. This UPI partnership will be real-time and it will be capable of crossing borders.
All person to person money transactions and remittances between India and Nepal will flow like water. Not just person to person transactions but all the transactions related to the merchant’s part will be carried out effectively if this collaboration gets realised.
The benefits are endless, as UPI is one of the most famous methods of payment in India. India is the second-most populous country in the world and UPI is a hit here. With all the volume of transactions that are received from here, it will benefit a lot from Nepal and it will add a good amount of transactions to Nepal too.
In 2021, UPI enabled 39 Billion financial transactions amounting to commerce worth USD 940 Billion, which is equivalent to approximately 31% of India’s GDP. UPI’s real-time payment infrastructure will help catalyse the process of financial inclusion in Nepal and will also create more opportunities for businesses. It will help modernise Nepal’s digital payment infrastructure and bring the convenience of digital payments to citizens of Nepal.
Ritesh Shukla, CEO of NIPL said, “We are delighted to join hands with GPS and Manam Infotech to facilitate the deployment of NPCI’s flagship Unified Payments Interface in Nepal. At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators. We are excited about this partnership, which will enable consumers within Nepal to transact swiftly using a state-of-the-art UPI platform and deliver a seamless user experience. We are confident that this initiative will stand as a testimony to NAPLes technological capabilities and vision of scaling our unique offerings globally.”
Naga Babu Ramineni, Director of Manam said, “Manam has always been part of major digital transformation across the various regions of the world, we believe this partnership will eliminate all the barriers of payment transformation within Nepal and across the border thereby transforming the regional economy.”
Rajesh Prasad Manandhar, CEO of GPS said, “The same UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation. We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society.”
How Will UPI Be Implemented in Nepal?
The neighbouring country of India, Nepal has good population stats. Out of all the population of Nepal, about 45 percent have bank accounts. That 45 percent account for something about 30 million people. Mobile penetration in Nepal is over 135 percent.
Moreover, it is reported that 65 percent of the population uses smartphones which will provide a good base for UPI payments. Not only this, the three major companies will work towards increasing the volume of transactions.
The three companies we are mentioning here are the UPI backed service providers. It is NPCI, National payments corporations of India, GPS, Gateway payment services, and Manam Infotech. All these three companies will work together to employ all the necessary equipment to make Unified payments accessible in Nepal all over the place.
It will also enable the way forward for real-time cross-border P2P remittances between Nepal and India, NPCI said. UPI service has created a significant positive impact in India in terms of the country’s digital payment transformation, Rajesh Prasad Manandhar, CEO of GPS said.
“We expect UPI in Nepal would play a pivotal role in transforming the digital economy of the country and dreams of building a less-cash society,” he added.
In 2021, UPI enabled 3,900 crore financial transactions valuing USD 940 billion, which is equivalent to approximately 31 per cent of India’s GDP. NIPL, being an internationally focused subsidiary of NPCI, is looking to drive deep collaboration with overseas partners in the areas of UPI like deployment, cross-border remittance, acceptance, using indigenously developed technologies in digital payments.
“At NIPL, we are committed to transforming payments by taking our robust payments solutions to global markets and collaborating with local payment system operators. We are confident that this initiative will stand as a testimony to NAPLes technological capabilities and vision of scaling our unique offerings globally,” Ritesh Shukla, CEO of NIPL said in the statement.
UPI’s real-time payment infrastructure will help catalyse the process of financial inclusion in Nepal and will also create more opportunities for businesses, NPCI said.
NIPL, being an internationally focused subsidiary of NPCI, is looking to drive deep collaboration with overseas partners in the areas of UPI like deployment, cross-border remittance, acceptance, using indigenously developed technologies in digital payments, NCPI said.
All the three organisations have nodded to set up a laid out plan in this path. They will be working together in a closely-knit target and process that will enable UPI in Nepal.
The benefits, as previously mentioned are countless. There will be ease in transactions of any sort, people and merchants will be the group of people who will be the first and foremost most affected in a good sense.
In short, it is a great move and that is why the NPCI and the concerned authorities nodded directly to the proposed news. This move is looked at as a win-win for both countries.
UPI is amongst the most successful real-time payments (RTP) systems globally, providing – simplicity, safety, and security in P2P and P2M transactions in India. It is the most popular payment mechanism in India and the recent news said that Nepal will also be accepting this. This is a great move and will benefit both countries in transactions. The better the volume of transactions, the better will it indicate and benefit the growth of the country.
The benefits are endless and will help all the people across the borders who indulge in regular payments across larger boundaries of the land.
FAQs
Is UPI made in India?
Yes, the UPI platform and technology is designed in India and is regulated by RBI.
Who regulates UPI in India?
The Reserve Bank of India (RBI) regulates UPI in India.
How many UPI users are there in India?
There are around 300 million active monthly users of UPI in India.
There is a high chance that you don’t remember the last time you used ‘cash’ for a transaction at a Kirana store. The world is changing and it is becoming cashless, not a new thing but more like the new normal.
The shift from cash to cashless is so welcomed all over the world that it has become the new normal. Tech in transactions is the most in-demand technology and has proved to be really penetrative in every society.
The most famous technology is the UPI. It stands for Unified Payments Interface. It is the most favourite bridge that enables transactions all over India. We all know this and we see just this aspect of the story. However, that is not all. Behind the scenes, a lot of fights happen for customers and numbers. UPI apps are almost always constantly at war. In this article, we talk about these apps and what is the issue that they deal with. But first, the basics.
UPI or the Unified Payments Interface is the most famous bridge of transactions in India. It is fast and secure which makes it the perfect alternative for cash. Handling cash is hard, handing a UPI is not hard at all.
Immense growth was led by UPI last year, which recorded more than INR 73 Lakh Crores in 2021. Moreover, a year-on-year rise of over 110% as opposed to INR 33.87 Lakh Crores transaction in 2020.
UPI is a system that has the ability to attach multiple bank accounts with a smartphone application. That application can be later used to transact with the bank that the user uses. This makes it easy to go cashless when your bank account is linked to the UPI app in your pocket. It’s like taking the bank in your pocket.
Benefits of UPI
You can send money almost immediately through any smart device and even a basic buttoned device.
UPI is available at any hour and any day of the year.
As the name suggests, UPI is a unified payment method that enables a user to add more than one bank account to the application.
2FA is more than easy in this process. 2 FA stands for two-factor authentication which is easily managed with a UPI pin along with the inbuilt app pin.
UPI is easy because it saves you the time of writing details like Card number, IFSC code and all the bank page clutter.
Total Transactions of UPI Apps in India
UPI is the future of payments, or should we say the smart present of payments. The numbers point in this direction as well. We see that just in the first month of this year, UPI transactions touched the cap of 461 crores. Those crores transactions totalled to be worth about 8.31 Lakh Cr.
The topmost player surprisingly was not Google Pay, In terms of market share PhonePe carried out 21,403 Crore transactions. Those mentioned transactions were worth INR 4.05 Lakh crore in the first month of the year.
The new entrant in the payments market, WhatsApp Pay saw the value and number of transactions grow to great magnitudes. The overall share of the company however is as low as 0.03 percent which entails about 13.4 lakh transactions in the first month. Those transactions were reported to be around 205 Crore in Indian Rupees.
In the month of January, the UPI transactions were recorded to hit the number 461 crore. Those transactions in the month touched the magnitude of 8.3 lakh crore in Indian rupees, equivalent to 111 billion dollars.
This number was not usual in any sense and was the highest recorded number in the history of UPI transactions. Even after this number is the highest in the magnitude of UPI transactions, it grew only about 1 percent month on month. This is in no doubt a jump and halt situation.
Noticing the surge in transactions and magnitude in the UPI sector, it was also noted that app performance had not grown that much. App wise, the growth was not new, it was the previous pace that continued and no jump was noticed in the app sector.
Apps performance recorded a single digit of growth in this month on month. Even in this segment, PhonePe was the winner that carried 4.05 lakh crore transactions. Google Pay, which most people were anticipating, did not come to the first resort. It was the second runner up in the race of UPI transactions. That maintained to get some transaction value that was worth almost three lakh crores.
The third number, in terms of transactions and magnitudes, was won by the Indian player that is also now a publicly listed company. Yes, you guessed it right, it is Paytm. Paytm saw a transactional rate of 85 thousand crores which was a fall from before. Amazon pay got transactions that were worth about 67 hundred crores. WhatsApp, the new entrant in the payments market touched the 205 crores of transactions with its messaging app which is now a UPI payments app too.
Among all these numbers, one thing is common, that thing is UPI. It is the transaction that everyone is looking at and it is also the point of conflict of many multinationals.
UPI war is on with all the players in the market. The goal is to get maximum density in markets and to get a viable customer experience that can increase loyalty. Before we read more about the ongoing UPI war let us read some important words in the UPI market. Basically how the UPI world works.
There are many technical terms that can confuse a noob when we talk about technology. The UPI world is also not an exception. Let us talk about a few things that the UPI entails before we read more about the UPI war.
VPA ID
VPA or virtual payment address is the virtual address of someone. As the name suggests, it is the address to which payment in a transaction can be directed. To begin a transaction, one has to share their virtual address to which the payee can direct the payment.
The payer has to confirm the VPA by entering the MPIN, or mobile pin, to be sure that it is an authentic translation and is done by the owner of the bank account. Once checked, the transaction is completed and a change in balance is reflected, without any delay.
QR code
QR code is a better alternative for VPA IDs, these are codes that can be scanned via a mobile device. Stores have these types of transaction mechanisms that help in the easy collection of payments from buyers.
They can be scanned from the UPI app itself and transactions can happen easily. This is easy and faster than sharing VPA IDs and most smart stores have them as a payment aid.
QR Code Scanner
Several Bank Accounts can be added using the UPI app and Several VPI Ids can be maintained. A maximum of 20 transactions is allowed in 24 hours. All transactions take place on a real-time basis.
The Mobile Number
Most people in India are not tech-savvy and this is a hindrance in payments via UPI. Even if someone sets up a VPA and UPI Id on a shopkeeper’s device, he won’t know it and would not remember it.
UPI apps save the day with one more feature. Mobile numbers can also direct payments to the right address. This feature was enabled recently and has massive use cases.
Every mobile number now is connected to the bank account of the holder and can serve as a UPI or VPA ID. They are known as linked MMID and can direct payments to the right bank account.
Bank Credentials
Another factor in payments of UPI is the bank credentials themselves. You can manually enter the saving account number and/or the IFSC code to the UPI app and the app can direct payments to that specific account. This is however not the best alternative to transactions but is popular in India.
NFC
New smartphones nowadays come with a new technology called NFC. NFC is an audio technology that is contactless and can connect two devices. This connection can also help in UPI transactions and is authenticated by both ends. According to RBI guidelines, one can interlink all their existing KYC compiled e-wallet accounts. But, only a few apps provide this service.
Market Share of UPI Apps and the Ongoing UPI War
A Detailed Look at the UPI App War
The UPI apps we are talking about, have their own territory. Market share refers to that territory in this context.
PhonePe
Last year the UPI app with the most wins was PhonePe. This year the war continues. PhonePe won on all the key metrics that there is to track payments. Be it the value of transactions, registered users and all the merchants’ average.
While PhonePe’s count of transactions remained the same, the volume of transactions rose to 48.7 percent. The startup has been the leader in the market with over 46 percent market share in the transactions volume processed last year. This metric proves the dominance that the UPI startup has gathered.
PhonePe’s share in transactions counts remained the same but the volumes transcended a big jump and it rose to about 48 percent. The company also claimed that the ‘registered users’ have crossed the 350 Million mark. They also mentioned that they were witnessing a 28 percent month on month growth from January to December 2021.
PhonePe is the first payment platform in India. Based out of Bangalore, this UPI payments app became the heartthrob of payers. The company collaborated with Yes bank to get into the UPI space and captured about 37 percent of the new market in India. Later, the company was acquired by e-commerce giant Flipkart. It is soon to be added as a valid payment option in Walmart India’s “B2B Cash & Carry Stores”.
They had the first movers advantage in many aspects. Just like the google pay (Tez earlier) app, the PhonePe app has a lot of features that make them stand out. With the money transfer limit using UPI set to ₹1 lakh, one can pay credit card bills too. An outstanding UI is a cherry on top.
Google Pay
Next in the line of market shareholders is the most household name of Google pay. They didn’t witness significant growth. The market share for google pay dropped from 37.5 per cent to 34.4 percent. According to an NPCI guideline, all third party UPI apps have to add a cap to the value of their transactions at 30 percent by December 2023. This can be good news for this fall in the market share of the US fintech giant.
With great goodwill at the back, Google really stands on a pedestal. The google pay UPI app is by far the most famous UPI payments app in India. Google has always remained a top innovator in every part. Any of the Google services can be relied upon. The name Google itself stands for efficiency and simplicity. The Google Play app has also made it easy for app users to use proximity features. They have NFC enabled in the app.
The payments app from google has all the features that it takes to make it the best UPI app out there. With online trade being a fast option for most people, google play also includes more than 2000 merchants partners in India alone. In India, Google pay is the second-largest UPI payments app with a market share of 35 per cent. It entails figures like 320 Million transactions in terms of volume and 61000 crores in terms of value being the guns on its trajectory.
The app really features loaded and has every feature of a top-notch character. Carrying the ‘Simplicity’ thing that google has managed to carry on all its services and apps, the UPI app has managed to get the second most UPI payments in the country.
PhonePe and Google Pay were the topmost choices of UPI payments in the last year. We will discuss the rest later, let’s focus on the war of these two first.
Paytm
Paytm is another famous name in the UPI segment. It has an inbuilt feature of wallet which can be used without KYC and bank account, this is one of the most unique features that the app has. It is also a differentiator. The war of UPI apps has led Paytm to get a share of almost 6% in the UPI segment. This is rather small but the app has a lot of potentials. The primary rivals are Google Pay and the leader PhonePe.
Paytm was the first digital payment service provider that had its hands on Indian territory. The homegrown brand is the largest digital wallet service provider in the country. The app is known to have dominated the cashless payments market. The company also claims that they have more downloads across Android and IOS than most UPI payments apps. The initial problems that the company faced were the UI and the acceptance of digital payments in India.
After updates and updates with learning’s and learnings, the Paytm app has improved much and now comes with an excellent UI. The app first lost in the war of UI and user experience but the overall performance has been quite impressive. It is the most famous homegrown UPI app in India. Founded by Vijay Shekhar Sharma and being a homegrown company, the startup has a lot of leverage that adds to its revenue.
Paytm is one of the easiest to use UPI apps out there and not only that, the app offers a long list of features. There is a unique wallet feature, then there is a Paytm bank, then a mall on your phone, it is also now entering the investments category.
You can pay your credit card bills, do shopping of all sorts and buy now pay later options are available too. Thus, this small package of apps offers a decent amount of features and accessibility to money and transactions. That is one of the main reasons for its market share of 6%, which is decent in India.
Amazon Pay
The next rival or participant in the UPI war is Amazon Pay. The new entrant in the market with great tech support and seamless payment options, amazon pay is out there to win.
As of November 2020, it was reported that amazon pay was the fourth most used app in the UPI segments. The app wins over everyone in terms that it is a sidekick of payments in shopping. The brand of amazon gives it a good boost. It was reported that Amazon Pay got 37.15 million transactions in volume that added to over 3600 crores in total value. Which is a pretty good sum in the segment.
Not only a shopping aid but the amazon pay app also offers payments of groceries and small buys at a Kirana store. The shopping integration of Amazon is really a great kick start but the app is also growing out of that segment too. Amazon pay got 37.15 million transactions in volume with Rs 3,624.51 Cr in transaction value in this month.
The ongoing war is nothing but a fight of features and like-ability. The app that has the most unique and helpful factor wins the game and takes the customers. All the top players in the market which we discussed above have their own set of features and uniqueness. Here we will try to uncover what lies behind the bush of differentiators.
PhonePe
PhonePe, the most used UPI app in terms of volume, is bound to have awesome features and traits. The startup has made its app look really different and simple. The app is capable of linking various accounts and e-wallets to itself.
You can link free charge, Jio money, and e-wallets like Airtel wallet to your PhonePe account. The app also allows people to pay credit card bills within the app which saves a lot of hassle.
The users of PhonePe can even buy gold with the new update. Cashback and rewards are the most common features of UPI apps in the market. PhonePe has that, without mentioning it. The app follows all the guidelines of UPI payments and thus, one can make a transaction of upto 1 lakh. The app also has the basic categories of regular payments like electricity, gas broadband, data card and the like.
Bill payments and recharges are very easy on PhonePe and there exists a separate icon for money transfer from bank accounts. You can check bank balances too and they are super attentive to negative feedback. Which makes it the all-rounder UPI payments app.
Google Pay
Google Pay is another famous app. The UPI app from Google runs on the same principle as of the parent company Google. The app is simple and works every time without any hassles. However the wallet option is not available, the app does work overtime to make it right for users. You just need a mobile number and a bank account to start your payments. It is easy and reliable.
You can chat with a person on google pay before and after any transactions. The User interface and the experience that it entails is also top-notch. Payment services are available across all the Google services and they can also be used to 3rd party apps. There exist extensions like Zomato, Swiggy, Groww and etc. within the application itself. It is the first to use NFC technology. DTH, broadband, landline, mobile recharges are also reminded to the user. The app is secure and has a safety shield feature too and users can also enable biometrics.
Paytm
The app comes with an excellent user interface now and is completely made in India. Which makes it a famous application among Indians. The app has one of the most differentiating features of a wallet that helps it find a good product-market fit in the UPI segment. Many people who do not operate a bank account can go with this feature of e-Wallet. Paytm Payment Bank is linked with Rupay Virtual Debit Card.
Due to all the features and an excellent UI, the app works in most locations. From a small Kirana store to big malls, Paytm is accepted. You can even invest your money directly from the app itself. Paytm services range from bank to mall to mutual funds etcetera.
Amazon Pay
Amazon Pay is also a famous app because of its parent company, Amazon. The app first originated as a payments app for nearby UPI payments. Now the app has grown into a full-feature app on its own. It is a great aid in shopping for people who love to shop.
Apart from that the app also makes it possible to use it as a UPI payments app. This was the unique feature with Amazon pay but it is not that famous like Google Pay and others.
The reason is that many people don’t know about it, Amazon customers just use Amazon to buy something and forget about their account. Once this barrier is lifted, the Amazon pay app can be a big disrupter in the online payments market.
UPI Guidelines and Regulations
When the online market in the payments sector is booming, it becomes important that the market is regulated. NCPI has come forward to make some guidelines for UPI payments. Here we will discuss some of the most notable ones. These are the guidelines for TPAP, or third party app providers.
NPCI’s guideline had asked all the third-party app providers (TPAP) to cap their transaction value at 30% by December 2023. This means that UPI payment apps like PhonePe and Google Pay now need to rescue their market share. As per NPCI, the upper limit for UPI is Rs. 1.00 lacs.
The Third-party app provider guidelines for TPAP guidelines are also aimed to prevent oligopoly and to promote competition. Competitions will be healthy for the overall market and it has the ability to make the market a little better than before for everyone. These guidelines were also the reason why WhatsApp has a very small UPI share in the whole market. WhatsApps share is equal to 0.08 percent.
Adding to the guidelines above, The NPCI has also disallowed WhatsApp from leveraging its payment platform. They have ordered a cap of 50 crores. This means that Whatsapp payments will not go above the magnitude of 500 million dollars or 50 crores. It is to be noted that WhatsApp had around 487 million registered users in India last year. In 2021, it had 390 million active users growing 16% year on year in India alone.
It was recently seen that the messaging app WhatsApp is entering the payments market which makes people suspicious. WhatsApp was also made to put a cap on their payments feature to prevent monopoly over the market. Their users were limited to 20 million. But now the revised relief says that the company can double down the users of the payment, NCPI said.
Now the cap is reported to be 40 million and WhatsApp has done really well in the past financial year. In January, last month, WhatsApp recorded a total of 23.4 Lakh transactions. That was worth INR 205 Cr. It also entailed a 9% month-on-month growth (highest among the top four, mentioned in the article).
RBI has mentioned that about 50% of the transactions through UPI were below INR 200, thus, a framework to enable small value digital payments in offline mode has been announced. Users will now be able to make small transactions (within 200 rupees) offline (without the use of the internet). We will now be able to channel transactions without any instruments such as cards, wallets and mobile devices in any UPI app.
100% of post office banks will come under the core banking umbrella to boost financial inclusion. The move is aimed at giving access to post office bank accounts through net banking, mobile banking, ATMs, and also provide online transfer of funds between post office accounts and bank accounts, During the Budget 2022 speech, Finance minister Nirmala Sitharaman said.
To boost the adoption of digital banking services further and to mark 75 years of India’s independence, 75 digital banking units in districts will be set up by scheduled commercial banks, Finance minister Nirmala Sitharaman said.
“This will be helpful, especially for farmers and senior citizens in rural areas, enabling interoperability and financial inclusion,” she mentioned in her Budget speech.
All the guidelines point in one direction, and that direction is the direction of a cashless future. We are all moving to a cashless world where paper money will be a thing of the past. This was not easy before but looking at the current trends and shifts in technology, it is the near future. Exciting as it gets, the UPI market in India is set for more tides and currents.
As per a report by ACI Worldwide, India retained the top spot in terms of digital transactions worldwide. India saw payments of 25.5 billion on a real-time basis. It is the highest number, followed by China.
No doubt, that the UPI market is set for growth in India and anyone capitalising on this will make real cash. This is the reason UPI payments companies are fighting for this and thus the UPI war.
Apps like PhonePe, Google Pay, Paytm and amazon pay have been fighting for market dominance and the market is evenly distributed in most parts of India. Besides growing in India, the Unified payments interface is all ready to enter overseas as well, reports say. UPI will be prevalent in countries such as the USA, the UK, Japan, China, Singapore, etc.
FAQ
Which are some of the Indian UPI apps?
Phonepe, Paytm, and BHIM are some of the UPI apps based in India.
Are UPI apps safe?
Yes, UPI apps are completely safe as it is regulated by the Reserve Bank of India & NPCI.
Which payment app is the best?
Google Pay, Paytm, Phonepe and Apple Pay are some of the best payment apps.
The term “FinTech” is the combination of finance and technology and is referred to the provision of new solutions in the field of finance by IT venture companies. New business models are being created one after another, particularly in the area of B to C services using the Internet. The major difference between these new businesses and traditional finance companies is their thought regarding IT investment.
The use of information technology is generating dramatic changes in financial services making it more easier and efficient to use. Payment services were previously having the players like banks and credit card companies, but now variety of new players have entered the field making it more easier and beneficial for the people of the country. Correspondingly, UPI payments impacted FinTech Industry.
One of the reasons why UPI services has been adopted globally with trust. When you use UPI to pay for things, card information is not shared with merchants, meaning that even if the merchants are hacked, people using UPI payments are safe from leaking information.
Another reason why UPI payments is revolutionizing the Fintech Industry is its hassle free approach to pay and register. All that is required to validate your UPI is simply an authentication of your Aadhar card, your finger prints are scanned and your mobile phone number is verified.
The Indian society have a strong fear of fraud, both in physical retail and online. Although governmental interventions to use digital transfer modes for payments had taken place in India, it is still a very cash-based society. If we take a look at credit card usage, which is a basic form of digital payments, adoption of such payment services are low in the states of India as compared to the US, UK, Japan or South Korea. Building trust in digital payments services is the key.
The take-up of digital payments or any other FinTech services will be about how the FinTech industry can provide customers with comfort and trust, enabling them to feel safe and secure using the service. The use of mobile is already driving the biggest change in financial services history. Mobile is considered as the fastest mass adoption of a technology in history than any other technology. There are already 7.2 billion mobile devices today. With UPI payment services, mobile was only 1% of all transactions in 2010, it is now above 45% in 2019.
CEO of National Institution for Transforming India (NITI), Amitabh Kant in an interview had said that Fintech market in India is likely to expand to $31 billion in 2020 and this owes largely to the use of UPI payments. This is mostly because India is the only country in the world with over a billion mobile connections and bio-metrics, provides an enough scope and opportunity for penetration of fintech technology.
Indian FinTech market is estimated to jump to $140 billion in 2023 and by 2025, Fintech industry valuation is estimated at $150-160 billion.
UPI has made payments easier: Gone are the days, when people used to carry huge bundle of cashes as they traveled or visited a restaurant. With the introduction of UPI payments, it is now become an easier and more secure while travelling.
UPI has made the buying and selling easier through e-commerce: UPI has made the buying and selling through fintech app solution, easier for the e-commerce companies. When a diverse range of devices are connected via the Internet of Things (IoT), it possible to obtain historical data concerning peoples’ daily activities. Using these life-logs, the e-commerce platforms are able to analyse patterns of regular and illicit activity, increasing their ability to detect illicit activity.
Enhancing trust for both customers and businesses: UPI payments has initiated and created a trust between the buyers and sellers. This is due to the privacy that is maintained within the system. UPI transactions are always payer initiated and demands the approval of the payer by an OTP. This is focused on person-to-person (P2P) transfers.
Payments via UPI are extremely quick: Another noteworthy feature of the UPI that has created a huge demand for it in the Fintech industry is that the payments or transactions are done extremely swift. There is no lag and delay which helps in the smooth flow of business.
With UPI you can directly link your account to the BANK and there is no need for virtual wallets: There are many virtual wallet companies like Paypal, PayTM, Mobikwik etc, which requires you to put some money within the virtual wallet, but with the use of UPI payment you can directly use the money from your savings account.
You may also keep a record of your bank transactions through UPI: UPI also enables you to keep a record of the withdrawals and deposits, this saves time for people who would have otherwise visited the bank to update their passbooks. This creates a major benefit for the elderly people who do not need to visit banks and they can transfer whatever amounts they want through an application.
UPI in the last two years has made another innovation where you can request credit through your overdraft (OD) account. This latest value addition eliminates the risk of fraud credit card calls and the risk assessment involved through traditional credit facilities from banks. Thus we can rightly say that a culture of innovation and entrepreneurship has emerged with the use of UPI in the Fintech Industry and we could not have been more proud. It Revolutionised the idea of daily payments and also improvised on the security of transfers.
FAQs
What is UPI full form?
UPI’s full form is Unified Payments Interface.
What is UPI in banking?
Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI).
What is a FinTech industry?
FinTech stands for Financial technology. FinTech is an economic industry that includes companies that use technology to make financial services quick and efficient.
What is UPI Technology?
UPI is a unified interface of NPCI that merges various banking services and wallets payment and other features under one payment system. One UPI ID and a pin are generated. A UPI ID and Pin are used to send and receive money and real-time bank-to-bank payments can be made.
