Just after 8 months of demonetization, India has a new digital payment scheme: Unified Payments Interface (UPI). This radical shift in digital payments uses smartphones to authorize and approve online transactions.
The UPI system was launched on August 24th, 2016, a day before the government’s announced deadline. According to the Reserve Bank of India (RBI), it is a system that allows the transfer of funds from any UPI-linked bank account to any other UPI-linked bank account without having to provide details of the beneficiary’s bank account, IFSC code, or mobile number.
Unified Payments Interface (UPI) has become one of the most famous terms in the Indian payments ecosystem. In a short span of time, banks are providing their UPI-supported apps to their customers. Airtel, Reliance Jio, and now even state-run banks like SBI have joined hands with NPCI to provide UPI services through their mobile applications.
The idea of introducing UPI was to solve the complication that arises while transferring money between two accounts. Before the launch of UPI, it was not easy to transfer money between individuals. While sending money to a merchant the money would be deducted from the payer’s account and the receiver would get it. It was good enough for a few transactions but as time passed, more and more payments became complicated.
In October 2019, UPI crossed 1 billion transactions and has over 100 million active users on its platform. Both the platform and the technology were growing bold but then Covid-19 happened and things took a break.
Amid the pandemic, BHIM UPI has shared their last three months’ report of the number of transactions and the transaction value attached with it.
It can be seen in the image above that the number of transactions that happened in April 2021 was 2.64 Billion with an attached transaction value of 4.93 Cr. The number of transactions is 3% fewer than it was in March.
It is obvious to see a dip as the states went into lockdown and many industries are facing a hold since last year. Hopefully, things would get on a better side and we can assume to see a growth in the number of both transactions and the value that they hold.
What are your views on UPI and what do you think the future holds for India’s very own payment infrastructure. Do share your views in the comments and we would love to discuss them with you.