Features of Unified Payments Interface (UPI)

The Unified Payments Interface (UPI) is a revolution in the Digital market because of the following features:

• User-friendly and supports easy and secure money transfers between bank accounts.
• It’s an instant payment solution that facilitates inter-bank transactions.
• It enables widespread digital payment solutions in the country.
• It was developed and launched by the National Payments Corporation of India in 2016.
• It boasts over a billion transactions every month.
• Till July 2022 number of banks on UPI has reached 338 in comparison to 235 banks in July 2021 and the volume of 6.28 billion from 3.25 transactions.
• The National Payments Corporation of India, in the next 3-5 years, targets to achieve 1 billion transactions per day on the UPI platform.
• Karthik Raghupathy, head of the strategy and investor relations, PhonePe, recently said to a magazine that the volume of UPI transactions has gone up to about 46 billion in the FY22 from 5 billion in Financial Year 2019, which accounts for more than 60% of all non-cash transaction volumes in FY22. 

The National Payments Corporation of India (NPCI), set up by RBI and the Indian Banks’ Association for operating retail payments and settlement systems in India, recently approved an additional 60 million users on UPI for WhatsApp. So far, this has been a significant development for digital payments. The NPCI aspires to bring innovative technology to retail payment systems and provide a robust infrastructure to the Banking sector for physical and electronic payments. It is already facilitating secure payment solutions at a minimal cost through a bouquet of retail payment products such as RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag) and Bharat BillPay.

The digitization of the market generated the need for online payment and banking transactions. The onset of digital payment fulfilled the need for a convenient payment method both for the customer and the retailer. In a country of 1.39 billion people, around 71 billion digital payments were recorded in 2022. Estimating the future growth of digital payment, RBI formulated a collective Digital Payment Index (RBI-DPI) in 2018. In order to gauge the extent of digital payments taking place across India. Multiple parameters have been considered to evaluate digital payment modes to construct the Digital payment Index. During Covid-19 Pandemic 2019, there was a significant rise in the RBI-DPI index, indicating the surge of Digital payments in the country. 
The Digital Payment Index (DPI), released in September 2021, shows an increase of 39.64% as 304.06 DPI against 217.59 in the same month. As per the index for March 2022, DPI is at 349.30 from 304.06 for September 2021.