In the past few years UPI in India has grown rapidly. This method of payment is known for its convenience, comfort, efficiency as well as safety.
With such tremendous growth & widespread adoption the most common question in every person’s mind is: “Is UPI the sole option for every digital transaction in our country?”
Let’s delve further and explore some more details about UPI and other alternatives now and in future.
UPI In India
Before we get to alternatives of UPI, let’s understand the concept of UPI and when it started in India.
Concept of UPI
UPI, short for Unified Payments Interface, is an instant payment method that was developed by NPCI back in 2016. Through this payment is done in 2 ways: One is Inter Bank P2P and other one is Person-to-Merchant (P2M).
It is quite a powerful method with multi-bank power integrated into one application on your mobile devices. Here are some of the features offered by UPI:
- QR Code
- Immediate real time transfer
- Click two factor authentication
- Best for COD payments
- Complaints raised easily via mobile
- Best for donations & collections
- Utility payments OTC payments done easily
History of UPI
The reason NPCI was formed was to integrate payment methods in India for all kinds of retail users. This process started back in 2009. Data gathered by RBI in 2011 revealed that every individual in India does 6 kinds of transactions that are non-cash every year. On the other hand there were more than I retailers that accepted cards.
One shocking face revealed in 2011 was that more than 145 Mn families in India had no access to banking services. Due to this black money, corruption and false transactions were difficult to trace and tackle.
In 2012, RBI released a vision statement that had a commitment of developing a safe, secure & authorized payment system for Indians. Thus, UPI came in 2016 and became available to the public.
Since then UPI growth has been exponential and it has become the most used and reliable payment method for all. It was so successful that even the US began developing “FedNow” which was based on the same model as UPI.
UPI 2.0 was launched in 2018. Using this people could link their O/D accounts to their handles. By 2021 popular banks like SBI, BOB & PPB were live. Later on the need for a debit card to register for UPI was removed. Thus, more banks and people became interested.
RBI in 2022, allowed linking of RuPay cards to UPI. Because of this customers were able to pay the credit card bills even if they didn’t possess a physical debit card. Everything seems to be in favor of retail users till now, right?
Refunds were allowed for payments done via UPI by 2023. Here is a list of some of the popular banks that are Live Members:
- Axis Bank
- Bank of Baroda
- Bank of Maharashtra
- HDFC Bank
- ICICI Bank
- Indian Overseas Bank
- Jio Payments Bank
- Kotak Mahindra
As of 2024, many popular regional banks like Karnataka Bank, Jammu & Kashmir Bank, Dombivli Nagari Sahakari Bank etc are Live members as well. Constant developments in technology will surely make it a comprehensive platform for all.
Did you know that as per records, UPI will cross 100 billion transactions by 2024?
Alternatives To UPI In India
The main question is whether UPI is the only method or are there some alternatives. Even though it is a one stop solution in India, many challenges lie ahead.
In 2023, RBI proposed a lightweight payment solution known as “Bunker”. The main reason is to ensure that less volume transactions can be done via bare minimum staff requirements from anywhere especially in case of a natural calamity.
Obviously there are many traditional alternatives to UPI like:
- NEFT
- RTGS
- IMPS
- Cards
- Internet Banking
- Physical banking etc.
But UPI being technologically advanced is more simple and quick. It is also real-time based.
Most common UPI app that was used by Paytm. Users either used the services of PPB or linked their other bank accounts to facilitate UPI payments via Paytm. But in March 2024, Paytm took a hit and people started searching for alternative apps. If you are one of them then you can look for some alternatives like Google Pay, Phone Pay, BHIM, Amazon Pay and now even Whatsapp Pay is live.
UPI in India: Is It The Only Option For You?
With the increased adoption of smartphones and high penetration of the internet, UPI in India will become more and more popular. Along with it, as technology progresses services offered by UPI will constantly grow and new use cases will develop.
In the future we can expect UPI to become more evolved but it is still unsure as to whether a new payment method as swift as UPI will come or not.
What is your take on the future of UPI in India? Are you waiting for a new payment mode? Do comment down below.