Five Key Ways UPI Is Shaping India's Payments Landscape The convenience offered by UPI has made it the go-to digital payment option for consumers today
By S Shanthi
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Unified Payments Interface (UPI) has revolutionized the way we make payments. For the uninitiated, UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood, NPCI explains.
The pilot launch of UPI was on 11th April 2016 by Dr. Raghuram G Rajan, Governor, RBI at Mumbai and banks started to upload their UPI enabled Apps on Google Play store from 25th August, 2016 onwards. In FY 2022, PhonePe held 46 percent share of UPI usage in India, followed by Google Pay with 34 percent.
Here are five Key trends that are today shaping the UPI payments landscape.
Empowering foreign travelers
With UPI One World, the RBI has opened new possibilities for foreign travelers in India. Now, they can load PPI (Prepaid Payment Instrument) wallets linked to UPI, enabling seamless payments across all merchant outlets accepting QR-based UPI payments. "Initially available for tourists from G-20 countries, these wallets will be accessible at select Indian airports. Additionally, the RBI has permitted two banks and two non-bank PPI issuers to offer this facility to foreign nationals outside the airport premises," said Rahul Jain, CFO, NTT DATA Payment Services India Ltd.
In the future, this feature may be extended to all foreign nationals visiting India. "By facilitating UPI transactions for travelers, this move too is expected to boost the scale of UPI transactions significantly. This showcases India's prowess in the digital payment industry and its contribution to nation-building," Jain added.
Introduction of offline payments
UPI 123Pay has revolutionized payments by offering the option to feature phone users or offline usage of smartphone users. India has a base of 320 million feature phone users, according to August 2021 data from Counterpoint Research. That is why this addition is considered one of the most significant developments in the world of digital payments.
UPI 123PAY is an instant payment system for feature phone users who can use Unified Payments Interface (UPI) payment service in a safe and secure manner. Through UPI 123PAY, feature phone users can undertake a host of transactions based on four technology alternatives, including calling an IVR (interactive voice response) number, app functionality in feature phones, missed call-based approach and also proximity sound-based payments.
Easy recurring payments
With digitization progressing every day, the number of payments a customer has to make on a monthly or annual basis has also increased. This is where the recurring payments option comes in handy. With UPI Autopay, customers can now enable recurring e-mandate using any UPI application for recurring payments such as mobile bills, electricity bills, EMI payments, entertainment/OTT subscriptions, insurance, mutual funds among others.
"The versatility of UPI Autopay spans various use cases, encompassing utility bills, online subscriptions, loan EMIs, insurance premiums, and more. By simplifying the payment process, this feature ensures timely and seamless transactions without the need for manual intervention, granting users greater convenience and peace of mind," said Jain.
Cross-border payments
Leveraging India's G20 presidency, the Indian government has significant plans to expand its digital infrastructure like UPI and Digi locker, globally. The government intends to take these payment solutions models on a global front.
"It's a slow start but I believe it will pick up in times to come. Being the world's first such cloud-based infra linkage it is still in its early-adoption stage. Though the UPI-PayNow linkage has seen progress as they are adding new users and use cases. A stolid pickup could be an impact of the low daily remittance limit of just 1000 Singapore dollars, low awareness and low adoption to newer technologies are few of the reasons for slow progress," said Milan Sharma, founder and CEO, 35North Ventures.
Paytm has also said it would soon launch UPI-based cross-border payments. In April this year, Venlo, a neo-banking platform, launched a UPI-powered app to provide a faster and effortless cross-border payment experience for users. Several countries have also expressed their intent to adopt homegrown UP), and India will provide the technical know-how, software and handholding support to these countries, National Payments Corporation of India (NPCI) MD & CEO Dilip Asbe told the media in January this year.
Combining the advantages of credit cards and UPI
The integration of RuPay credit cards with UPI is also considered a revolutionary step in the digital payments landscape as it combines the advantages of both credit cards and UPI for consumers.
"With millions of Indians already utilizing UPI apps for online transactions, its convenience has garnered widespread acceptance among merchants and customers alike. Now, with the ability to link credit cards to UPI, the level of ease for consumers escalates significantly, eliminating the need to carry their physical cards. This move is set to drive digital payment adoption to new heights, particularly in areas where POS terminals are not easily accessible," added Rahul Jain.
