5 Ways UPI Could Transform Retail Payments in India
India being world’s second largest population has unimaginable potential in its domestic market. This potential has not been tapped into because banking services were available in less than 100,000 villages in the country. Second, only a fraction of India’s millions of retailers use accept card payments.
While these factors are on the negative side, there is however a light at the end of the tunnel. India has one of the highest mobile users in the world. It is expected there would be about 500 million mobile phone users in India by 2018. Thus, reaching to this section of the market was the primary focus of the Reserve Bank of India and National Banks in the country.
The Indian Government through its National Payment Corporation of India (NPCI) has created the Unified Payment Interface (UPI) to tap into the potential of its domestic market and solve the hurdles in reaching them. Here are few factors through which UPI is expected to change the retail market in India forever.
- Putting mobile first:
UPI makes the mobile as the primary device. You could make all types of payments including person-person, person-business and business to person, while also enabling users to pay and collect cash from someone.
- Dig deeper from the rural market:
Statistics show that there are about 250 million Aadhaar payment bank accounts, making 1.2 billion transactions a year with around 77,000 micro ATMs. UPI allows you to use your Aadhaar number, mobile number or your account number as your unique identification number. With the inclusion of Aadhaar, and the ability to use it as your only identification number goes a great way to help the rural population
- Reliability and adaptability:
Keeping in mind the needs of the government, the interface has been designed to take the workload of over a billion transactions without crashing. The second most important aspect is the adaptability. While the sender and receiver could be using different devices, different operating systems and different versions of operating systems, transactions would be smooth, fast, safe and error free.
- Complete integration:
UPI makes all transactions of every form interoperable through all banks and platforms. All you need is an M-Pin to secure all your transactions.
- Extremely Cost- Effective:
Binny Bansal, CEO of Flipkart, says slow adoption of digital payments has been one of the biggest hurdles for mass adoption of online shopping in India. Overcoming this hurdle is the biggest achievement for UPI. Making payments online is set to be much cheaper in terms of transaction charges compared to Credit Cards and NEFT transfers. With UPI, transactions upto Rs. 100000 could be made at transaction charges less than Rs. 0.45.
UPI has become the bench-mark and standard bearer for cash free money transactions as many e-wallet designers are implementing UPI compliance to stay on track with this simple efficient technology.