Today is an era of digital transformation and one of the most powerful transformation is digital payments. Not only at an enterprise level but also at individual level digital payments have changed the way people buy and sell. One of the biggest boons or disruptions that has happened in India in the last 5-7 years is undoubtedly UPI or Unified Payments Interface. Launched in April, 2016 UPI has today become the backbone of digital payments in India. In fact it will be a rare chance that anybody with a smartphone does not have any app that uses UPI. Almost all nationalized banks and major applications and payment gateways such as Google Pay, Phone Pe, Paytm and not to forget BHIM (released by NPCI in 2016 as an offering from Central Government) use UPI as the underlying payment interface.

These apps have entirely changed the way customers carry out transactions or payments irrespective of whether it is B2B or B2C. The penetration of UPI is so extensive that even a simple roadside fruitseller or chaat seller accepts digital payments. It has its strong presence not only in urban but also in rural India. It simply needs a scan of the QR code with your smartphone having an UPI based app and there you can do the payment with your fingertips. I personally feel that UPI is the best thing that has happened as far as digitization in finance is concerned after internet banking and mobile banking.

UPI is not only limited to cash payments. In fact by integrating with your mobile number and aadhar / PAN, one can enable various other services such as electricity and phone bill payments, booking LPG cylinders, taking OTT subscriptions and the list goes on and on. The greatest impact of UPI can be seen in the retail sector – both organized and unorganized. Whether you go to a big mall or supermarket or even a local kirana store you simply have to carry your phone (and probably a non plastic carry bag) and you can buy everything. The best part is totally non contact payment and relief from the hustle of changes if you were to pay in a big denomination note. A surprising aspect of the latter is that today very less cash returns are happening and so the returns done by shopkeepers using chocolates or toffies (for changes upto 10 rupees) has diminished to such an extent that the manufacturers of such chocolates are facing a drop in their revenue !

There are many benefits of using UPI based payment apps. One need not carry cash or cards while going for shopping either through e-commerce or physical brick and mortar stores. In short get rid of your wallet. I personally have ditched the wallet at least a year back and was amused to find out only a couple of days back that there was only a 5 rupee note in my wallet ! A very big achievement that has been made possible through the widespread apotion of UPI based digital payment at a macro level in the country is opening of bank accounts of small streetside vendors and kirana store sellers who were otherwise accepting physical cash. Now there are a number of positives due to this adoption. First, the middle man is getting away from the scenario and sellers are getting their due directly into their accounts. Second, tracking of each and every transaction irrespetive of the denomination is possible and one cannot hide or fake their income for tax purpose. This perfetly aligns with Digital India mission which government is seriously pursuing.

UPI based digital payment interface has totally disrupted financial transactions in the country and it can be arguably considered as the next big thing after the economic reforms in the 90s. India is today proud to list its name among the top digital adopters in the world. The fact that although India has 140+ crore of population and is today the most populous country digital payment adoption has happened at a very fast pace. Of course the push was provided by two major events – demonetization in 2016 and then the COVID pandemic in the last couple of years. India is now in its 76th year of independence and digital payments is definitely aligning with financial liberation. It will be really interesting to see new innovations and features that will grow around UPI and I am sure this will entirely change the financial landscape of India in the coming years.