Achievements of Unified Payments Interface (UPI)
- During the epidemic year 2020–2021, digital transactions using UPI had amazing development, and numerous nations have expressed interest in learning from India’s experience in order to duplicate the concept.
- According to figures from the NPCI, the UPI’s transaction value surpassed USD100 billion in a single month for the first time in October 2021, further solidifying its status as India’s most widely used digital payment system.
- By 2025, the Indian digital payments market is expected to have grown from its current value of Rs. 2,153 trillion (27% CAGR) to Rs. 7,092 trillion.
- Strong use cases for merchant payments, government initiatives like the Jan Dhan Yojana and the personal data protection bill, as well as the expansion of MSMEs, the millennial generation, and high smartphone penetration are all expected to contribute to the growth.
- Recently, for instant, low-cost, cross-border fund transfers, the central banks of India and Singapore will connect their respective Unified Payments Interface (UPI) and PayNow fast digital payment system. In July 2022, the connectivity become operational.
Unified Payments Interface (UPI) and its Challenges
A system called the Unified Payments Interface (UPI) combines several bank accounts. It makes easy fund routing, and merchant payments into a single mobile application (of any participating bank). Additionally, it supports “Peer to Peer” collect requests that may be planned and paid for according to need and convenience. It is an immediate real-time payment system that enables customers to transfer money between different bank accounts in real-time without disclosing personal information to the other party. The National Payments Corporation of India (NPCI), which is governed by the Reserve Bank of India (RBI) and IBA (Indian Bank Association), established the concept of UPI.