Smartphone-powered Revolution: The Impact of UPI and Digital Payments on India's Digitalization Journey
Posted: Thu Feb 15, 2024 12:02 am
Greetings to each and every one of you,
As we embark on an exciting journey through the ever-evolving landscape of technology, I’m thrilled to connect with each one of you in this article.
Let’s delve into the groundbreaking world of UPI in India, exploring its impact on digitization, financial inclusion and the dynamic shift it brings to our everyday lives.
A majority of us have been using UPI on a daily basis without even knowing how it has digitised India’s payment system on a large scale and how smartphones have helped in this process. You may ask what UPI is?
Unified Payments Interface or UPI is an instant real-time payment system developed by NPCI to facilitate the inter-bank transactions through smartphones.
The introduction of UPI has played a pivotal role in advancing the digitization of payments in India.
Let’s look into how UPI has helped in this digitization and how integration of smartphones in this process has enhanced the user experience.
- Simplified Transactions: UPI has simplified the digital payment process, allowing users to initiate payments with just a few clicks on their mobile phones. Prior to this, a user could transfer money online only through their specific banking apps and it was a tedious and complex process of making the payment. UPI’s ease of use has made it more widespread among all generations.
- Interoperability: UPI is designed to be interoperable, allowing users to send and receive money across different banks and payment service providers like Phonepe, Google Pay and many others. This has eliminated the need to maintain multiple digital wallets.
- QR Code Technology: UPI uses QR code technology enabling merchants and service providers to accept payments without the need of expensive equipment like POS terminals. It makes it easier for the user as well to just scan the QR code and make payments instead of entering details of the merchant in the payment app of their choice.
- 24/7 Availability: UPI transactions are not restricted by banking hours. The 24/7 availability allows users to make payments or transfers at any time making it more convenient and flexible.
Let us look deeper into how Smartphones have enhanced and improved the UPI experience:
- Mobile apps Accessibility: UPI transactions are primarily conducted through mobile applications provided by banks and third-party payment service providers. The ubiquity of smartphones has made it convenient for users to download and access these apps, facilitating easy initiation and management of UPI transactions. With just a few taps you can easily make payments, check your transactions, check bank balances and more.
- User-friendly Interfaces: User-friendly design of the UPI apps makes it very straightforward and easy for individuals to understand and execute payments contributing to overall ease of use.
- QR Code Scanning: As stated earlier, UPI works on QR codes set up by merchants. Smartphones which obviously have cameras make it easier for the user to scan the QR codes instantly and make payments faster. QR codes have streamlined the payment process.
- Biometric Authentication: Most of the recent smartphones are loaded with biometric authentication features like fingerprint scanners or facial recognition. UPI apps use these authentication features to better improve the security of transactions and thereby providing a secure way to authorise the payments.
- Push Notifications: Smartphones enable instant push notifications, keeping the users or merchants well informed about their UPI transactions in real-time. This allows users to monitor their financial activities.
- App Updates and Innovations: Smartphones allow for regular updates to the UPI apps introducing new features and improving security with every update.