UPI (Unified Payment Interface) is the biggest revolutionary since India's independence. It is a system that has hit America badly and has made India sting in the financial world. UPI was introduced in the year 2016. The first transaction platform introduced by RBI in 2000 was RTGS with a limit of transactions above 2 lakhs, then on people demand RBI introduced NEFT for less than 2 lakhs transaction. RBI (Reserve Bank of India) formed NPCI (National Payment Council of India) in 2008 to bring about a faster payment system. On public demand led to the introduction of IMPS in 2010. NPCI launched several upgrades of IMPS, IMPS allows transactions below 2 lakhs to be done immediately through mobile phones. However, people could not pay the merchant with this and this led to the birth of UPI in 2016 which was the upgraded version of IMPS.
UPI is considered the brain child of both Raghuram Rajan and Dilip S. Rajan. In a month, UPI made India number one in the world in terms of digital payments with over 100 million transactions. With the help of Jio, which gave everyone access to the internet, and the boost from de-monetisation in November 2016, UPI spread rapidly. UPI has over 22 crore transactions in Delhi alone, and its gross market value is worth more than 10 lakh crores.
America has been the king of the Financial World since the beginning due to dollar currency and it has Swift technology to make the international payment, financial policy, IT Technology and it has always been dominant. Now developing country like India has brought such a Technology which America does not have and it has come with ease, no matter what, it has brought it comfortably,
India has made a new company NPCI International Payment Limited and the aim of this company is to apply UPI system all over the world. Bhutan, Dubai, and Singapore have implemented it and ten other countries have expressed their interest. UPI has become dominant in the financial world.
"UPI is a cool system." The most interesting thing is that France has also shown interest. If France accepts UPI, The advantage of this technology is that tourists will not need to convert their currency while visiting France and no need to carry Forex card, you can take mobile directly to make the payment through UPI. It will also benefit the environment.
"UPI is a cool system." The most interesting thing is that France has also shown interest. If France accepts UPI, The advantage of this technology is that tourists will not need to convert their currency while visiting France and no need to carry Forex card, you can take mobile directly to make the payment through UPI. It will also benefit the environment.
Every year more than Rs. 2 lakh crore are spent in printing and maintaining currency notes. Because what happens in the note, many times the notes got torn, many times the note was cheeked or someone wrote on the note, then the note gets damaged and it takes many years to replace these notes. UPI will help to reduce the costing and this reduced costing will help to develop the UPI Technology.
Why Visa Card and Master card are worried?
Lets go back to older days when new ATMs were started opening, if you had ICICI Bank ATM then you had to withdraw money from ICICI Bank ATM only as you could not withdraw Money from other Bank's ATM as they did not want to share the account information. Then Visa and Master Card (Network companies) came in picture and provided the services to all the banks with little charge for the support provided. These companies (Visa and Master Card) started verifying the payment to use any Bank's card. The charge which is taken by these companies (Visa and Master Card) is called MDR (Merchant Discount Rate).
MDR ranges from 1% to 3% and this MDR is 0% in UPI payment. This will decrease the Dominance of Visa and Master Card. These companies are worried if this UPI system is accepted by all over the world in that case Visa and Master Card will be loosing their Dominance in the World.
RBI has recently introduced 3 new features in UPI.
1. Linking UPI with Credit Cards. 2. UPI Lite :- You can make the payment even without the internet.
(You can keep Rs. 2000 in UPI and you can do 200-200 transactions and you don't need internet for this)
3. UPI 123 (123Pay) :- (Feature Phone Payment Solutions) No need of Smart Phone for this feature.
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Dial the number 123 to the UPI number and make the payment. (Give a missed call to UPI number to pay the amount. (Enter amount and Enter UPI Pin))
There is another feature called UPI Auto Pay since 2020 (to make the monthly bills payment and monthly EMI payment automatically by UPI).
UPI is very fast, and in 2023, it is easy to pay instantly without any charge or cost. There will be no charge levied for transactions, and the merchant banker will not charge anyone.
A lot needs to be done on the infrastructure, and technology needs development. UPI will take some more time to become smooth
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