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5 Ways How UPI is Changing the Payments Ecosystem in India

UPI Payments Ecosystem

UPI has touched almost all sectors of India

Last week, I was at a new tea shop near my house. The tea cost me a meager ten rupees. But, upon checking my wallet, I was shocked to find it empty. The shop owner read my situation and told me, “Madam you can pay via GooglePay. Look at the code scanner, just scan and pay.” Then came the live-action of the UPI payments ecosystem in India.

I was in for another shock when my Google pay account was temporarily down. I saw the customer queue increasing. Immediately, I downloaded Phonepay into my mobile. Phonepay is a prominent app which supports UPI transaction. The payment took place within no time. This is the outreach of the UPI across the payments ecosystem in India.

UPI Payments Ecosystem in India

Why has UPI captured the payments space within four years of its inception? What makes it stand out from wallets or digital cards? UPI offers an immediate payment service with the help of either a VPA, mobile number or Aadhaar number. It makes the transaction channel secure and hassle-free.

UPI has made its mark felt in the different sectors of the Indian economy like Education, Health, Social Sector Schemes, etc. In the course of this blog, let us explore the outreach of the UPI payments ecosystem in India.

Payments Ecosystem 1: Government Schemes

Government of India’s flagship program Digital India aims to make India a digitally empowered society. Launched in the year 2015, Digital India relies on advanced technological infrastructure to serve the needs of the customer. Of this, digital payment forms an important cum core part.

In tune with its Digital India initiative, the government launched the BHIM UPI (Bharat Interface for Money). It makes use of the UPI platform for immediate bank to bank money transfer. Transfer validation happens either using a VPA (Virtual Payment Address) or a mobile number.

Key government schemes like Jan Dhan Yojana and Direct Benefits Transfer (DBT) have started using the UPI payments interface, transitioning from the RTGS or the NEFT based platform. It brings in ease and security to the payment transactions since the user does not have to remember complex details like the account number, bank name, etc.

Payments Ecosystem 2: Education

The education sector is witnessing rapid stride in the use of the UPI Platform. Payment platforms like Razorpay, Instamojo, SabPaisa, etc. have enabled it on their platform. For example, SabPaisa is the world’s first hybrid payment platform. It offers numerous payment modes ranging from UPI to Cards to Netbanking to Cash to NEFT. UPI is one of the focal product that helps in seamless payment transmission while paying college admission fees or paying the late fine.

Payments Ecosystem 3: Health

Health schemes in India are transitioning to the use of digital payments like UPI. Further, to promote the use of UPI, the government provides a number of incentives.

The major health schemes in India are Universal Health Insurance Scheme (UHIS), Ayushman Bharat, Aam Aadmi Bima Yojana (AABY), Rashtriya Swasthiya Bima Yojana (RSBY), etc. As part of the schemes, patients can pay through various digital modes like UPI, BHIM, credit/debit cards and wallets. The Ministry of Health and Family has issued advisories to all government and private hospitals to facilitate digital payments for ease of transactions.

Payments Ecosystem 4: Business

The business sector is witnessing new opportunities with the rapid advancements in UPI. For example, Fintech companies in India are being flooded with requests at an international level for UPI customization. Further, NPCI has relaxed the rules for small companies by increasing their monthly limit of Rs. 50,000. Also, the merchant onboarded under this category does not have to pay anything to the acquirer.

Payments Ecosystem 5: Miscellaneous

UPI has pervaded every aspect of our life. In addition to Tier I cities, Tier II and Tier III have seen an increased use of UPI. For example, if a user in a Tier III city wants to do a DTH recharge, he has to simply open the UPI app on his mobile and scan the code on the TV screen to kickstart the payment process. Similarly, UPI is used to buy on-demand movies in a seamless manner with the click of a button.

On the whole, UPI is the ripe technology of the future which continues to make notable advancements in a rapid manner. From education to the business sector, UPI has touched upon all the major sectors of the Indian Economy. In commensuration with Artificial Intelligence and Machine Learning, UPI holds significant promise for the future.

References:

For more blogs, visit SabPaisa Blog

YOU ARE READING THE ARTICLE COURTESY: SabPaisa (SRS Live Technologies) – headquartered in New Delhi with eight regional offices including Mumbai, Bangalore & Kolkata – is a rapidly growing Fintech company having developed one of India’s most advanced AI-driven recurring payments platform bolstered by another of SabPaisa’s unique products: world’s first hybrid payment platform which has all the payment modes in a single checkout page, online and offline, from UPI to Cards to e-NEFT to e-Cash. Businesses that take SabPaisa’s payment gateway get real-time reconciliation and consolidated reports for all payments, recurring or one-time, online or offline, in a single dashboard, whether the payer is an 18-year-old in Kashmir paying through UPI or a 70 year paying through Cash in Kanyakumari. SabPaisa’s payments and collection application suite have already processed more than INR 12 Billion to date.

Learn more about SabPaisa here: https://sabpaisa.in

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