How are digital payments and UPI’s making space in the Indian market from 2016?

Digital is growing at a rocket speed. With the upcoming digital trends where they try to woo customers differently, people have been in their favor. The mode of digital payments has reached a massive scale in India. It is not just the companies who want to be trendsetters in digital payments, but the customers also have started understanding the benefits of digitization during their purchases. It is so much of comfort rather than carrying money, and it has made their life much more comfortable.

People have started relying on these digital payment modes while making payments; cash usage has come down to the point where most people are using these digital modes of transactions. The digital industry is growing at a good pace that is better for the companies and is also better for improving the economy. The demonetization has made people switch to digital payment modes, and they prefer it over any other thing. When there were insufficient cash and limited cash availability during demonetization, they were forced to switch to digital modes.

With the upcoming COVID-19 pandemic, contactless payment was a much safer option for paying the purchase. The digital caught more fire from here. The hit by coronavirus pandemic has made the digital grow at a rapid pace. 

Indian is the world’s fifth-biggest online customer base platform, and with this, the people using mobile internet is also a driving force for digital growth. The growth of new technologies like UPI, e-wallets, and others have given customers a way to make purchases in a fraction of seconds. The technological transformation which India is seeing has pros and cons. Let us have a look at them both. 

Pros:

• Easy way of making payments as they are hassle-free and time-saving. Anyone who has access to a smartphone and a bank account can make payment with zero need for hard cash. 
• The new technology of digital payments has bought transparency as everything is done through digital mode, so the cash dealing has reduced. The scope of losing cash and other activities like stealing crimes will also be reduced. As each transaction you make will be recorded. 
• The companies have been growing a lot with digital India. The business houses are getting so many opportunities from this. A lot of giant enterprises have already entered the game. GooglePay, Paytm being some of the most famous ones. 
• The boost in the e-commerce sector can be seen with the upcoming digital payments and UPI’s. The increasing trend of online shopping will catch more speed as digital payments and smartphones continue to be there. 
• Digital payments save time and other resources. As it has a lower operational cost, so this is a positive factor for the entire industry. 
• The freedom to send money to your near and dear ones can done infractions. On the one hand, the earlier modes had the barrier of time and reached to be comparatively done in easy ways. 

Now looking at the pros, digital payments do include some serious questions that need to be addressed. These can be disturbing to the entire society—one of the biggest cybercrime and related things. The use of technology can be vulnerable for people who are less aware. 

Cons:

• There can be a lack of trust in people regarding digital modes of payment. If we look at the bigger picture, people still feel insecure while using their digital methods. That is why some of them still prefer or go by the other ways of making transactions.
• Illiteracy being one of the most significant drawbacks of digitization. Most of the people who lack education will have no understanding of technology. It will also obstruct them to have full knowledge of the digital world. 
• When there is digitization or technology, it has its strings attached to cybercrimes. People who have harmful intentions will try to commit fraud with people using these modes and their money. It must also be the reason for the lack of trust that people possess to have for digital payments. 
• The internet customer base is growing, but it will take time to reach a point where each person would be a smartphone user. There is a need for more internet penetration.

Technology cannot just have all the advantages; it will come with cons. But the digital world of payments and UPI is has taken its track in India. They have a vast customer base as they so much to please their customers by Rewards, cashback, coupons, and other things.

If we look at the data by the National Payments Corporation of India, the Unified Payment Interface, popularly knows as UPI, crossed around Rs 3 lakh crore market in September. The number of 180 crore transactions amounting to Rs 3.29 lakh crore was done on the UPI platform in September 2020. And if we look at the figure for August 2020. The total number of 161 crore transactions was done to an amount of 2.98 lakh crore. This surge in the UPI payments have seen after the lockdown for the coronavirus pandemic was announced. People have been using digital payment modes at a vast scale as it is convenient and avoids contact with the Coronavirus.

Therefore the best five apps for UPI payments are :

1. PhonePe
2. Google pay
3. Paytm
4. Amazon pay
5. Bhim app

Google pay had caught customer’s attention when they came out with the strategy of scratch cards. Companies have been using different ways to connect with customers and get a more customer base. It is also essential for a digital payment company to trust the customers, as nobody will invest money, keeping their trust for the sake.

One of the most prominent examples of this trust with digital payments is when Paytm was removed from the google play store in September 2020. To which google pointed out that it was violating the anti-gambling policies of Google. The policies of google were to protect customers from any potential harm. The app allowed the users to participate in paid tournaments and win the real cash prize; as Paytm is one of the most popular financial apps, it might have lost many customers. Due to this, it might have lost many customers.

Paytm also tweeted for the same, ensuring its customers will resolve the issues and get the app back on track. Many instances like this in the digital industry can bring customers’ arguments that should be taken care of, and such things that would cause customers harm should be avoided. Then India will be a step closer to be a more positive digital India free of cyber attacks or other crimes. 

UPI

UPI is a single platform that merges with various banking services and features. A UPI ID and PIN are sufficient to send and receive money to anyone else. Real-time bank-to-bank payments can easily be made using a mobile number or virtual payment address such as UPI ID.

Who initiated UPI?

UPI’s initiative was taken by the National Payments Corporation of India (NPCI) successively with the RBI and Indian Banks Association. NPCI is the firm that handles the infrastructure of RuPay payments is similar to master and Visa Card.

What is UPI ID 

UPI is a banking system for money transfers on payment apps. If anyone wants to add a bank account to Google Pay, your bank must work with UPI. UPI ID is identification for a bank account. It is used to send and receive money, while UPI PIN is a four-digit personal identification number. It must enter to authorize the transfer of funds via UPI.

 How does UPI work?

UPI made the money transfer process more comfortable. It is not always required to carry or remember the bank account number of the receiver, account type, bank name, and IFSC code. UPI helps transfer the money by knowing their Aadhaar number, mobile phone number registered with the bank account, or UPI ID. 

Benefits of using UPI?

• Online payments can easily simplify.
• Pay for your food delivery services and shopping sites with UPI payments to help in instant money transfer.
•  Quickly can Pay online at the nearest restaurants, grocery stores, and departmental stores.
• Utility bill payments, rent and mobile recharge can pay through online.

UPI transactions use a highly secure encryption format that cannot easily be damaged. NPCI’s IMPS network handles nearly about Rs.8,000 crore worth of transactions per day. 

The banks that support UPI services are as follows:

1. State Bank of India (SBI Pay)
2. ICICI Bank (iMobile)
3. HDFC Bank (HDFC Bank MobileBanking)
4. Axis Bank (Axis Pay)
5. Bank of Maharashtra (MahaUPI)
6. United Bank of India (United UPI)
7. Vijaya Bank (Vijaya UPI)
8. Union Bank of India (Union Bank UPI)
9. Federal Bank (Lotza)
10. UCO Bank (UCO-UPI)
11. Yes Bank (Yes Pay)
12. Karnataka Bank (KBL Smartz)
13. Punjab National Bank (PNB UPI)
14. Bank of Baroda (Baroda MPay)
15. South Indian Bank (SIB M-Pay)

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