Unified Payments Interface

There have been various changes in the financial and economic systems throughout history, from the Middle Ages to the Present. We have shifted away from the use of seals, coins, and the barter system, and are instead relying on the use of ATMs, plastic money, and the most modern Unified Payments Interface (UPI) to achieve our goals. UPI was introduced in 2016, is an immediate real-time payment system that facilitates inter-bank transactions. UPI allows an individual to carry out cashless transactions through an application in his mobile set.

Created by the National Payments Corporation of India (NPCI), it is a system that integrates multiple bank accounts into a single mobile application (of any participating bank), allowing users to access several banking features such as seamless fund routing, merchant payments, and bill payment in singlehood.

According to the rules of the Reserve Bank of India, the Unified Payments Interface was developed in order to promote “cashless transactions” throughout the country. There are a plethora of applications available that provide this functionality. Additionally, the majority of bank applications now support UPI transactions inside their applications, according to the Federal Reserve.

UPI allows an individual to carry out cashless transactions through an application in his mobile set.

Some of the applications and banks that accept UPI payments are as follows:

1. BHIM (Bharat Interface for Money)
2. PhonePe
3. Paytm
4. Airtel Payments Bank
5. Google Tez (Google Pay)
6. SBI Pay
7. iMobile (ICICI Bank)
8. Axis Bank

Customers may connect numerous bank accounts using any UPI-enabled app on their smartphone. Money may be collected or received using any of the ways listed below:

1. Virtual Payment Address (VPA) or UPI ID
2. Mobile Number
3. Account number and IFSC
4. Aadhar
5. QR Code

What exactly is BHIM UPI?

In India, Bharat Interface for Money (BHIM) is a digital payment application (app) that operates on the Unified Payments Interface (UPI), a system that allows users to integrate various bank accounts into a single mobile application.

1. The National Payments Corporation of India developed the system (NPCI). 
2. The real-time financial transfer is possible. 
3. The website was launched in December of 2016.

Achievements of UPI

More and more nations have expressed their desire to learn from India’s experience with UPI in order to implement the concept in their own economies.

Data from the National Payments Corporation of India (NPCI) shows that for the first time in October 2021, transactions done using the UPI exceeded the USD 100 billion mark in a month for the first time.

By 2025, India’s digital payments sector is expected to increase from Rs. 2,153 trillion to Rs. 7,092 trillion at a CAGR of 27 per cent.

Government regulations like Jan Dhan Yojana and the Personal Data Protection Bill will undoubtedly contribute to the increase, as will the expansion of MSMEs, the rise of millennials, and the widespread usage of smartphones.

Challenges: 

As a result of the coronavirus epidemic, the danger of cybercrime in the worldwide banking and financial services business has grown significantly.

For example, malicious software Cerberus is a kind of malware.

Increasingly common scams include fraudulent claims, chargebacks, phone buyer accounts, promotion/coupon misuse, account takeover, identity theft, card data theft, and triangulation frauds, among other things.

Transaction Capacity for UPI

In the majority of circumstances, one may do around 20 transactions every day.

Some banks, such as HDFC, ICICI, PNB, and SBI, enable you to transfer up to one lakh rupees per transaction, however other banks may only allow you to send ten thousand rupees or twenty thousand rupees. The cost varies depending on the bank and the mobile application used.

BHIM UPI, for example, is a government-authorized application created by the National Payments Corporation of India (NPCI). The maximum per transaction is 20,000 and the limit per day is 40,000 rupees.

Types of transactions that may be carried out with the use of UPI

Remittances: With the help of UPI, you may send and receive money from your friends and family in a matter of seconds.

Payment of Bills: You may pay any bill, from your power bill to your cell phone bill, using UPI.

Transactions with merchants: You may pay for your online orders on sites such as Amazon, Myntra, Zomato, and any other e-commerce website.

Conclusion

A well structured Public-Private Partnership (PPP) strategy may create a 21st century engine to harness the power of market participants in order to deliver increased digital infrastructure, access, and literacy for the Indian people, as well as greater economic opportunity.

When conducted in the context of a thriving Indian democracy, public policy-driven digital empowerment of the Indian voters may assist in ensuring responsible digital behavior in the interests of consumers and the greater public good.