According to BCG Google Digital Payment report (2017), the number of non-cash transactions will exceed cash payments in India by 2023. Unified Payment Interface, developed by the Government of India is sure to have a huge part to play in this. Take a look at how it is integral to helping India go cashless.

Unified Payment Interface has been developed by National Payments Corporation of India (NPCI) to facilitate inter-bank mobile transactions. It allows bank account holders of all banks registered as Payment Service Providers to transfer funds between banks using this platform. Through this platform, users can send and receive cash by making use of single identifier. Instead of having to enter sensitive information, the bank will use the identifier attached to your account details to complete the transaction. UPI was launched in January 2016 and made available to banks starting 11 April 2016. Many banks have already started using UPI and many more are on their way to implementing it.

A great way to perform cashless transactions, here’s everything you need to know about UPI.

How does UPI benefit you?

  • It helps you by shortening payment processes and allowing you to use a single interface for transacting with multiple banks. You just have to share the Virtual Payment Address to complete the payment.
  • UPI also makes net banking simpler. Usually, if you want to do a bank transaction, you have to enter several details. These include your account name, bank account type, bank name, and IFSC code. Then you have to wait till the bank adds the payee which could be anywhere from 30 minutes to several hours. UPI can help you transfer money instantly, cutting the long-winded process short.
  • UPI is very secure as the transaction takes place in a highly encrypted format. It also has a 2-step authentication process as per RBI guidelines. Here, the OTP component will be replaced by an MPIN.
  • You will be able to transfer money, pay bills, and make payments for taxi services, food orders, and any other online payment. Many merchants have already tweaked their payment systems in accordance with UPI.
  • Adopting UPI is an affordable move. NPCI has stated that it will charge Rs.0.50 per transaction and will be reflected as IMPS transaction on your bank statement. On the other hand, when you transfer money via NEFT, you will spend between Rs.2.50–Rs.25, depending on the amount. For RTGS, the cost ranges from Rs.30 to Rs.55.
  • There are several players who have adopted UPI. Popular ones include Hike, Truecaller, and payment apps such Paytm, MobiKwik, and PhonePe. In fact, Hike was the first messenger app to introduce peer-to-peer payments using UPI and WhatsApp is on its way to do the same.

The only advantage that other payment gateways have over UPI is that they resolve any kind of payment disputes between the customer and the merchant, which UPI doesn’t account for. That being said, it is an issue that is expected to be addressed as the framework develops over time.

While India is one of the most cash-dependent countries, UPI is certainly changing the landscape. It definitely lays the foundation for a nation that is poised to go cashless, especially in the post-demonetisation economy. With over 200 million smartphone users, it is a move in the right direction. On the whole, UPI simplifies online transacting and encourages people to go cashless in a cost-effective manner.