Approach:

• In introduction, describe UPI and how it is considered as financial revolution
• In the body part, explain benefits of UPI to its participants.
• Conclude by giving positive futuristic view of UPI

Answers:

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments.

In FY 2017, the total number of UPI payments was 6% compared to 36% of Card payments. However, in FY 2021, UPI’s share expanded to 63%, while the percentage of Card payments shrunk to 9%. The Covid-19 pandemic has catalyzed the momentum of adopting digital payments across the country and made UPI the flag bearer of the ongoing financial revolution.

Benefits of UPI to its Participants:

1. Banks:
   1. Single click two factor authentication
   2. Leveraging existing infrastructure
   3. Enable seemless merchant transactions
   4. Payment basis single/ unique identifier
2. Customers:
   1. Round the clock availability
   2. Single application for accessing different bank accounts
   3. Use of Virtual ID is more secure
   4. Raise complaint from mobile app directly
3. Merchants:
   1. Seamless fund collection from customers – single identifiers
   2. Suitable for e-com and m-com transactions
   3. Resolves COD collection problem
   4. No risk of storing customer’s virtual address like in cards

Endorsements from Singapore, Bhutan & Nepal shows global acceptance and adoption of UPI which is expected to pull down the cross-border remittance cost.  It is also forecasted that by 2026, 1.12% of India’s GDP, will be boosted by UPI payment.