PAYMENT REVOLUTION

UPI Transformed India From Cash-Dependent To Digitally Dominant In Under A Decade

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In a post-pandemic world, the idea of how we live has changed materially.

Almost every aspect of our lives has been touched upon by technology today in a pronounced way. Today, even people with little education understand and use technology more effectively than their previous generations.

Sample this conversation. A domestic help asks the Google Mic the meaning of the words sent by his employer. And he commands the Google Mic the thoughts he wants to convey, copies the words, and sends them across to his employer. Also, in the evening, he does not forget to do a video call with his wife in his village. Indeed, technology has been adopted at a rapid pace in India.

Among the many technological transformations, one aspect where this shift has been particularly pronounced is the mode of payment. Payment through the Unified Payments Interface (UPI) mode has caught on extremely well in India, fundamentally changing how transactions are conducted. A recent Reserve Bank of India (RBI) report explains this phenomenon in detail, offering insights into what has become one of India's most significant digital success stories. Let us understand the journey of UPI payment in India.

THE BEGINNINGS

The National Payments Corporation of India (NPCI) developed UPI, with 2016 marking the early years of this revolutionary payment system in India. According to media reports, NPCI ensured that UPI services were available with 21 banks in that inaugural year.

Building on this foundation, transactions based on the UPI system began gaining momentum by late 2017, as noted by Penser, a consulting firm specialized in payments and fintech. By 2020, reflecting growing confidence in the platform, the limit of transaction value was increased to ₹2 lakh.