How have UPI transactions changed the Indian Economy?

Mankind has covered a lot of distance from dealing in barter to making digital transactions. Isn't it interesting how the internet is revolutionizing almost everything and influencing our daily life? 

Life becomes even easier after the introduction of UPI transactions in India.

If you are an Indian citizen, there are very low chances that you don't know about UPI. Well, even if you fall in the exception category, I am gonna explain to you everything about UPI in India and how it is changing the Indian economy.

UPI is a single interface payment system designed by the National Payment Corporation of India that helps you to make payments with the help of applications like Paytm, Google Pay, Phonepe, etc.

What is UPI (Unified Payment Interface)?

According to National Payment Corporation in India, UPI or Unified Payment Interface is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund transfer, and merchant payment in one application.

Why UPI transaction in India is in Demand?

The reason is quite simple and straightforward, everything that eases life is in demand. The UPI transaction is also smoothing the journey of making and receiving payments 10 times better than before. All you need to make payment is the UPI transaction Id or UPI scan code. And the very next moment, the payment will be transferred to the payee bank account from your bank account.

If you heard these things a few years back, you wouldn't believe it or think that it's magic. But today, it has become a reality, and you wouldn't have to think twice to digest this truth. The question is how is it changing the Indian economy?

Here are a few reasons why UPI transaction in India is changing the shape of the Indian economy:

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  UPI helps you to make the payment immediately from your mobile device to any other bank account in India easily.

  
  


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  The service of making UPI transactions in India is available 24*7 and 365 days.

  
  


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  The 2 factors of authentication make it reliable and trustworthy that are aligned with regulatory guidelines.

  
  


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  There is no need to know the bank details of the payee like account number, IFSC code, debit card number etc. All you need is his UPI transaction Id or QR code.

  
  

The Growth of UPI in India

I have some data that may surprise you and make you feel proud at the same time. In July 2022, the UPI transactions clocked at 6 billion transactions in a month. This is the highest number of UPI transactions in India in a month since its inception in 2016.

The most surprising thing is that it took 3 long years for UPI to reach 1 billion transactions a month, that is in October 2019. But thereafter it never looked back and continuously rise to the next level. It took only six months for UPI transactions to reach 5 billion from 4 billion and 6 billion from 5 billion. That’s truly insane.

And you know what the good news is, these 6.28 billion transactions amount to Rs 10.62 trillion. This is a huge amount and a proven statement to understand how UPI transactions increased the cash flow in India which is helping the economy to boom.

How is UPI helping the economy?

Easy transactions

It is one of the simplest ways to make payments. This new payment mechanism is an easy way to make payments to any seller directly from our bank account to the seller's bank account. This instant payment service is available 24*7. Just enter the virtual payment address or scan the QR code, and that's it, "ting-tong" your transaction has been successful.

Better communication with the bank

No matter in which bank your account has opened, a UPI transaction can make or receive payments from any bank to your bank with the help of any payment application. The UPI has made it very simple for banks to interact with each other at ease. It is important to have in mind that different bank accounts have different guidelines regarding the daily limit of UPI transactions in India.

Boon to new businesses

The biggest challenge that a new company face is related to monetary and especially day-to-day cash flow. UPI has changed everything for new startups and enterprises using the UPI payment system to meet their daily petty expenses. 

Winding Up

UPI is growing at an exceptional growth rate. Capturing a substantial share of the market from firms such as Phonepe, Google pay, Paytm, etc. The surge of UPI transactions in India provides immense support to new growing startups in India. 

The best point with UPI is that RBI constantly have an eye on UPI transactions in India to protect the people from any risk of losing their hard-earned money. Yes, the last few years were indeed great for UPI in India, but it is also true that it is just the beginning of the shift in the Indian economy. UPI transactions in India are playing a crucial role in expanding the GDP of India.