UPI- The Simple, Modular and Affordable Tool That Engendered Financial Revolution In India

This digital transformation voices the technological success story of our Country.

Gone are the days when you had to carry cash in your wallet or look for coins to give exact change. India has embarked on its journey of embracing a new realm of possibility- a realm where finance meets technology.

UPI, an entirely re-imagined instant real-time banking system, was launched in India in 2016 with an ambitious aim- To allow anybody, from impoverished communities to small businesses to merchant banks, to have a fast cashless interbank transaction using their smartphones.

Prior to the UPI era, in India, 98% of all economic transactions were done in cash. People were (and few are still) hesitant to welcome new technological advances due to many inhibitions, such as mindset, fear of transparency, lack of trust, or maybe being accustomed to the traditional way. But in recent years, India has opened its arms and tightly embraced this change, bringing paramount advancements in terms of simplified payments.

India's increased internet access, smartphone penetration, rapidly evolving e-commerce sector and demographic dividend have contributed to the rise of Fintech. The ministry of finance noted that India's fintech industry is expected to reach USD 150 billion in valuation by 2025 and that India's fintech adoption rate is 87 per cent against the global average of 64 per cent. All thanks to UPI- an instant real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank transactions through these apps.

Everybody warmly welcomed UPI with its negligible hassles and difficulties, along with the functionality of instantaneous transactions. Today you will see that everyone from your grocery vendor, your doctor, your boss, and even domestic help will have a UPI app on their phone. Everything from your electricity bills, travel bookings, shopping and any other online transactions can be made with the ease of scanning a QR code.

One of the most encouraging features of this ground-breaking payment method in India is its ability to promote financial inclusion. India, being a developing country, still has a significant disparity of socioeconomic classes in its population. However, the introduction of UPI has made way for a level playing field for each of those communities. It has also contributed to reducing class-based discrimination, something that was widely prevalent. Everyone now uses the same system to transact money, and there is no hierarchy of credit cards, debit cards, notes, or coins.

Overall, with the phenomenal rise of the digital payment space, UPI has not just increased the ease of transactions but also increased the holistic standard of living for people in India. With more and more Fintech firms breaking new ground through their powerful, cutting-edge technology, India has the potential to fundamentally reform and upgrade its financial infrastructure to absorb such large-scale progress and minimise technical failures, thus paving the way for new socioeconomic demography. The author is a Mumbai - based student writer: Sia Kusumgar