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In the year 2016 *, the National Payments Corporation of India (NPCI) launched a pilot program with 21 member banks – UPI. Raghuram Rajan (Ex-RBI governor) and NPCI launched this Unified Payments Interface (UPI) to merge multiple banking features and provide secure and hassle-free merchant payment and fund routing solutions. Click here to read how the UPI works and other payment modes.

From 21 member banks to 330 banks *, UPI  has come a long way and revolutionized the payments industry in India. As per records *, in 2021-2022, there were around 2200 crores of UPI transactions and it is anticipated that this figure will be around 16900 crores within the next 3 to 4 years. 

Recent Developments 

• Recently, France has also adopted the UPI system, and Lyra Network, one of France’s companies offering payment solutions has agreed and signed the MoU with NPCI International for availing the UPI services. However, France is not the first country to adopt UPI payments, instead, it is the fifth one. The first country to adopt UPI was Nepal, followed by Singapore, UAE, and Bhutan. 

• SEBI added UPI as another payment option for buying REITs and InvITs for the retail investors who apply for the public issue of these investment vehicles and the application value can be up to Rs. 5 lakhs *. This move can help retail investors to apply for public issues of REITs and InvITs using the UPI app on their smartphones only. On the other hand, this move can benefit the REITs and InvITs to get more investments as well. 

• Another significant development in this arena is the linking of credit cards to UPI *. RBI has been planning to link credit cards with UPI to make the credit card market revive. The credit card market share has been falling for the past 5 fiscal years. From a market share of 44% in 2017 to 30% in 2021 *, the market has been falling sharply and one of the primary reasons identified is the increasing use of UPI payments. Thus, linking UPI with a credit card can help credit penetration into the system of digital payments. 

Statistics

• As per recent data *, only in 2022’s 1st quarter, there have been around 936 crores of transactions via various payment modes led by UPI. These 936 crores of transactions amount to Rs. 10.25 trillion. 

• The average ticket size (ATS) for peer-to-peer transactions as of March was Rs. 2455 while the person-to-merchant ATS has been Rs. 860 *. 

Safety measures to follow

As the popularity of UPI is increasing so are the UPI scams. People pretending to be ‘Army men’ and other public servants are looting monies using UPI. So, be aware of scammers and recent scams. Here are some safety measures one should adhere to for securing their personal and financial details. 

• Never share the UPI PIN with anyone.

• Try to use a single UPI app.

• Always have a lock screen for your UPI apps.

• Try to use the UPI id over the phone number.