NEWS AFFAIRS 7 : WHERE EVERY STORY HAS IT'S AFFAIR!
Last updated on September 5th, 2024 at 12:20 am
In 2024 , when it comes to digital payment system of money then clearly no one even comes closer to India . A developing nation with more than 1.4 billion people , most populated nation on earth has beats the world in the online payment system with the introduction and widespread adoption of the Unified Payments Interface (UPI).
The UPI technology not only boost the tech economy of India , but also revolutionised the way of a hassle free money transfer and has also set a benchmark for other nations.
In this article, we will study the boom of UPI in India, explore how it outperforms giants like the US, China, Europe and other developed nations in online payment systems, and present detailed statistics to showcase its unprecedented success.
What is UPI?
Unified Payments Interface (UPI) is a digital payment system, which is designed to do real-time payment developed by the National Payments Corporation of India (NPCI) and launched in April 2016.
It facilitates inter-bank transactions by instantly transferring funds between two bank accounts on a mobile platform.
Single mobile application for accessing different bank accounts.
Some information and features about UPI :
- UPI allows seamless transactions between different banks.
- Real-Time Transactions: Funds are transferred instantly, reducing the need for waiting periods.
- Ease of Use: Users can transfer money using a simple mobile application, requiring only a virtual payment address (VPA).
- Security: UPI transactions are secured with two-factor authentication, ensuring safe and secure payments also raise Complaint from Mobile App directly
- QR code Facility : Scan and Pay
- Utility Bill Payments, Over the Counter Payments, QR Code (Scan and Pay) based payments.
UPI can be accessed on all platforms viz. Android / iOS – The Apps have been developed by members on Android 4.2.2 and above/ iOS 8.1 and above platforms.
Unimaginable Growth of UPI in India
UPI potential was clearly visible since its launch. Its user-friendly interface, coupled with robust security features, has made it a preferred choice for millions of Indians.
UPI’s achievements since its launch
2016: UPI was launched with 21 banks support.
2017: The number of transactions crossed 100 million mark.
2018: UPI 2.0 was launched, introducing new features like overdraft facility, one-time mandate, and invoice in the inbox.
2020: UPI saw a massive surge during the COVID-19 pandemic, crossing 2 billion transactions per month.
2023: UPI transactions exceeded 10 billion per month, making it the most widely used digital payment system in India.
How UPI dominates the world ?
Comparison with the US
The United States is still a in hand cash payment driven country ,there digital payments are primarily dominated by card transactions, digital wallets like Apple Pay, and peer-to-peer payment systems like PayPal and Venmo.
In the US money transfer from smart phone is not much advertise by government therefore the US digital payment system is not much developed , hassle free and friendly as India’s UPI right now, but card transaction is very prominent there.
Additionally, the US digital payment ecosystem is fragmented, with multiple players operating independently, leading to a less cohesive system compared to UPI’s unified approach.
Comparison with China
China is currently the best competitor of India population wise but in digital payment transactions it is also no where close to India. China Digital payment landscape is dominated by Alipay and WeChat Pay.
While these platforms are widely used, they operate within their ecosystems, limiting transaction. UPI, on the other hand, offers seamless transactions across different banks and payment platforms, providing greater flexibility and convenience to users.
Comparison with Europe
Europe has SEPA (Single Euro Payments Area) a well-developed digital payment infrastructure enabling cross-border euro transactions.
However, the adoption of mobile-based instant payment systems is still in its beginning stages. UPI’s ability to offer instant, mobile-based payments with a high level of security and ease of use gives it an edge over European systems.
Global Perspective
UPI’s success can be attributed to several factors:
Indian Government Support: The Indian government has actively promoted digital payments through initiatives like Digital India.
Broad Bank Participation: Almost all major banks in India are part of the UPI ecosystem.
Technological Advancements: Continuous upgrades and the introduction of new features have kept UPI ahead of its global counterparts.
Public Adoption: The simplicity and convenience of UPI have led to widespread public adoption.
Since UPI started, people have made over 400 billion transactions using it, with the total value of these transactions being more than 600 trillion INR. The number of transactions is growing every month, and in June 2024 alone, there were 12 billion transactions.
Currently UPI has over 300 million active users , from rural to urban areas and in businesses UPI is very popular in India
Merchant Adoption
A big reason why UPI is so successful in India’s due to rapid growth of India , and UPI hits the market at the right time when there is need to instant transaction of money. UPI is fast , secure , easy to use therefore so many businesses accept it from small vegetable seller shop to very big luxurious mall, UPI is accepted everywhere . Over 50 million merchants in India take UPI payments, so you can use it almost anywhere, whether you’re shopping online or in physical stores.
Security and Fraud Prevention
UPI is very secure therefore government itself promotes it. It uses two-factor authentication (like needing a password and a code sent to your phone) and end-to-end encryption (which means your transaction data is protected from start to finish). This makes it hard for fraudsters to mess with your money.
Government Initiatives
To boost India’s tech economy and solving so many Indians need to instant money transfer issues the Indian government has been encouraging people to use digital payments instead of cash. This includes measures like demonetisation and offering benefits for using digital payments. These efforts have helped more people start using UPI.
Future Prospects and Innovations for UPI 3.0
UPI 3.0 Enhancements
Credit on UPI: Soon, you’ll be able to borrow money directly through your UPI app, making it easier to get credit without the hassle.
Auto Pay: This feature will let you set up automatic payments for things like subscriptions and bills, so you won’t have to remember to pay them each month.
New International Payment System: UPI will start supporting payments to and from other countries, making it easier to send and receive money globally.
UPI and the Internet of Things (IoT)
Imagine your smart devices being able to make payments automatically. For instance, your fridge could order and pay for groceries when you’re running low. Integrating UPI with IoT will make such automated transactions possible, adding a new level of convenience.
Global Expansion
After its massive success in India, UPI is looking to expand to other countries. Several nations are interested in adopting a similar system like France, UAI, Singapore etc and partnerships with international payment networks could help UPI become a global player in digital payments.
Conclusion
UPI has completely changed digital payments in India with its ease of use and strong security. It has outpaced digital payment systems in places like the US, China,Europe and other developed nations.
The key to UPI’s success has been innovation, government support, and widespread public adoption.
As UPI continues to improve and expand, it is set to remain a leader in the world of digital payments. Its success not only highlights India’s tech capabilities but also shows how digital advancements can promote financial inclusion and boost economic growth.
What is UPI?
Unified Payments Interface (UPI) is a digital payment system, which is designed to do real-time payment developed by the National Payments Corporation of India (NPCI) and launched in April 2016. It facilitates inter-bank transactions by instantly transferring funds between two bank accounts on a mobile platform.
How does UPI compare to other payment systems globally?
UPI offers interoperability, instant settlement, and ease of use, which gives it an edge over payment systems in the US, China, and Europe that are often fragmented or lack real-time transaction capabilities.
What are some key features of UPI?
UPI offer features such as :
1. Real-time transactions .
2. Interoperability between banks .
3. Ease of use via mobile apps .
4. Robust security measures like two-factor authentication
How has the Indian government supported UPI?
The Indian government has promoted digital payments through initiatives like Digital India and demonetisation, along with providing incentives for digital transactions.
What is the future of UPI?
The future includes the launch of UPI 3.0 with new features like credit on UPI, auto pay, and international transactions, along with potential global expansion and integration with IoT.
How secure is UPI?
UPI is highly secure, employing two-factor authentication and end-to-end encryption to ensure the safety of transactions.
How many UPI users in India?
UPI has over 300 million active users and is accepted by over 50 million merchants, making it a universal payment method in India.
What impact has UPI had on digital payments in India?
UPI has revolutionised digital payments in India, making transactions easier, faster, and more secure, and significantly reducing the reliance on cash.
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