UPI is out to conquer the world! It has entered countries like UAE, Singapore, France, and Bhutan. Keep reading to explore how did UPI manage to reach new heights!
Let me ask you a question.
In the past few months, how many cheques have you issued? Or how many NEFT or RTGS transactions have you done?
We are sure it would be the bare minimum compared to your UPI transactions, right?
When we go to the mall or a local grocery store, we prefer to make payments using Google Pay, PhonePe, or PayTM. Simply put, using Unified Payment Interface or UPI.
This is the sole reason we have seen a surge in the volume of UPI transactions in India.
What’s Happening?
Until 2016, citizens used to rely on making payments using cheques, demand drafts, NEFT, RTGS, or credit and debit cards. Not just that, local stores would not accept any of these payment modes except cash!
Later, the National Payments Corporation of India (NPCI) came up with an instant real-time payment system named Unified Payments Interface, or UPI.
Since then, our way of making payments has changed. Now, we instantly transfer money from one person to another with just a click!
After achieving such massive success in India, NPCI came up with NPIL, the international arm of NPCI, and expanded it to various countries.
- The United Arab Emirates (UAE): NPIL partnered with Mashreq Bank’s payment business, one of the leading financial institutions in the UAE, in April 2022 and introduced NeoPay. This initiative will empower Indian tourists to make payments using BHIM UPI conveniently.
- Bhutan: In July 2022, in partnership with the Royal Monetary Authority (RMA) of Bhutan, they adopted UPI standards for its QR code along with the launch of the BHIM UPI app.
- Singapore: India’s UPI will soon be linked to Singapore’s PayNow. This will facilitate instant low cost and convenient cross-border fund transfers.
- France: NPCI International has also made a Memorandum of Understanding (MoU) with Lyra Network of France to adopt UPI.
The annual report published by RBI stated that similar to Singapore’s PayNow and UPI, NPCI will look to cooperate with other international systems to facilitate instant fund transfers (remittances) without the need to onboard onto another system.
Advancement of UPI’s Real-Time Payments
In 2021, India recorded the largest number of real-time transactions in the world! The number was three-fold what China had achieved. Not just that, India was seven folds ahead of the US, Canada, UK, France, and Germany, combined!
*Source: ibef.org
Why is UPI So Popular?
- The first unique feature of UPI is its accessibility to its customers. You can access any of your bank accounts through any UPI application and send money instantly. If we compare it with US FedNow, you need to open the mobile banking app and enter the recipient’s details.
- UPI is debit and credit card friendly. Previously, debit and credit cards would require an external device on the merchant’s side to conduct customer-to-merchant transactions. Through UPI, you can add a debit card to your UPI app, and you can transfer money within minutes. Now, you can also link RuPay credit cards to UPI apps.
- You can Scan and Pay anytime, anywhere.
- Lastly, UPI is free! There is no transaction fee involved, unlike credit or debit cards. According to a report published by The Hindu, the adoption of real-time payments resulted in an estimated cost savings of $12.6 billion for Indian businesses and consumers in 2021. This helped to unlock $16.4 billion of economic output, which represents 0.56% of the country’s GDP!
What’s Next?
The growing acceptance of UPI-based mobile payment apps and QR code payments among merchants never seems to subside. India’s UPI will always be the shining example for real-time payments worldwide.
That’s it for today. Don’t forget to share this article with your friends.
