UPI is an advanced payment system for today’s advanced world. It has changed the way people make transactions. It’s known for its large-scale operations and ability to handle a high volume of financial activity.
According to the Worldpay from FIS Global Payment Report 2023, the use of cash in India has decreased significantly over the past years. Cash transactions at the point of sale have dropped from 71 per cent in 2019 to only 27 per cent in 2022. On the other hand, e-commerce account-to-account payments, including those facilitated by platforms like Fave and Nearbuy, have seen significant growth, reaching $12 billion, which is a 53 per cent increase from 2021 to 2022.
During the period from March 2020 to August 2022, UPI emerged as the leading digital payment platform in India. It has witnessed a remarkable growth rate of 427 per cent in transaction volume. And here in this section, we will identify the key factors that have contributed to UPI’s success and its impact on India’s financial landscape.
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The UPI advantage:
It offers a user-friendly platform for people to transfer money quickly and easily. With UPI, you can link multiple bank accounts and make payments using things like mobile numbers or QR codes. It also ensures safety by using two-factor authentication. Overall, UPI has made payments more secure and easier for everyone involved.
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UPI has witnessed rapid adoption and growth:
Since UPI’s introduction, It has gained immense popularity in India. It’s easy to use, widely accepted by merchants, and supported by government initiatives to promote digital payments. UPI has transformed the way people make transactions by promoting cashless transactions, lowering costs and improving financial transparency. It has made financial transactions simpler and more secure for everyone.
What’s the impact of UPI on financial inclusion?
UPI has deeply impacted financial incorporation by giving access to financial services to millions of people who were previously unbanked or underbanked. It is acting like a bridge and filling a gap between traditional banking systems and those who didn’t have access to them. It empowers people to participate in the country’s economy.
How is it helping to drive economic growth and innovation?
The widespread adoption of UPI has changed how we make payments and fueled economic growth. It benefited businesses from increased efficiency, lower costs, and wider customer reach through digital transactions. UPI has also paved the way for innovation. For instance, many fintech companies use its platform to create new and exciting payment solutions and services.
Will UPI’s international integration transform cross-border payments?
Yes, integrating UPI with an international payment platform could transform cross-border payments. India’s UPI digital payment system has gained recognition and is set to benefit Indian users conducting business internationally.
After the collaboration between Singapore and India, it is set to follow the collaboration with other countries like the UAE, Mauritius, and Indonesia. These countries are more likely to integrate UPI with their instant payment platforms.
In a nutshell:
UPI has made India a global leader in instant payment. And it is taking the country closer to a cashless future. It has also played an important role in bringing financial services to understand communities, promoting transparency, and building a strong and inclusive economy. The convenience of UPI has extended to various sectors, including e-commerce and gifting, with the option to purchase and redeem online gift cards through digital payment platforms.
