How UPI has Revolutionized Online Payments in India

The history of online payments in India is very recent. In the 1990s, Indians relied heavily on cash transactions and barely even trusted credit cards. Although Paypal had been around since the early 2000s, hardly any Indians used it except for international transactions. True, Paypal is still mostly used for business transactions.

But how, then, did a society so deeply distrusting of cashless transactions move to an era where even the street vendors with the smallest of setups accept UPI payments through seamless QR codes?

UPI (Unified Payments Interface) was launched back in 2016 by NPCI (National Payments Corporation of India) and the first UPI app was BHIM. Now, almost all popular online payment apps use UPI (PhonePe, GPay, Paytm, etc.). Why? Because it’s the most convenient thing ever.

Until UPI came along, modern tech-savvy India had already started shifting focus to e-wallets and cashless payments. Oxigen wallet is the first-ever e-wallet in India, launched way back in July 2004. In 2006, the media giant Times Group, in association with YES Bank, introducedWallet365.com. But, the use of digital wallets really only picked up pace after the launch ofMobikwik in 2009.

The real game changer, however, was Paytm. Launched in 2014, they started with e-wallets but soon expanded into everything possible - you could shop online, book train tickets, buy movie tickets, invest in digital gold, and pay all kinds of bills on a single platform. Paytm integrated UPI into their system in 2017, and other digital wallets followed suit.

Now, you can do almost everything in the world of online transactions using only a single UPI ID. UPI can be used on and accessed across multiple platforms. OTT platforms like Netflix also allow users to set up recurring UPI payments (only a credit card feature previously).

Even in the i-gaming sector, most online casinos and sports betting sites now accept UPI payments. Market trends analysis shows that online casinos that accept UPI tend to get more users than the ones that still only support niche payment systems like Skrill and Neteller.

First demonetization, then the Covid pandemic, forced millions of Indians to embrace cashless transactions for their daily shopping and payment needs – and the simplicity of a UPI app on a smartphone (of which there are 750 million in use in India) has made UPI almost a default app on every handset.

With nearly 6 billion transactions a month, valued over Rs 10 lakh crore, and touching 260million users, India’s UPI has become the best-performing real-time ecosystem in the world. UPI has evolved into a simple, uncomplicated mobile payment platform, embraced by Indians in unbelievable numbers.

In 2020, NPCI launched a subsidiary, NPCI International Payments Ltd (NIPL), to take UPI to foreign markets. Now, merchants in Bhutan, Cambodia, Malaysia, Philippines, Singapore, and Vietnam already accept UPI payments, thanks to cross-border payment agreements. Nepal Is going to follow soon.

All in all, UPI has transformed the way cashless transactions and online payments work and is, without a doubt, NPCI’s biggest success story.

(Disclaimer: The opinions expressed are the personal views of the author. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)