In this day and age, transferring money has become unbelievably easy. Whether it is paying for items at a grocery store or sending some money to a friend, it can all be done within seconds using an app on your phone. There is no need to remember complex passwords, bank account numbers or IFSC codes. All you need to do is point your phone camera towards a QR code and enter your short 4 to 6 digit passcode. People are starting to forget the struggles of scrambling for the exact change, quickly calculating the balance and being physically present at the location for the exchange to take place. All of this is possible due to the development of the UPI payments system. Unified Payments Interface is an instant real-time payment system created by the National Payments Corporation of India (NPCI ) and regulated by the Reserve Bank of India (RBI). UPI facilitates both peer to peer (P2P) and person to merchant (P2M) transactions. This means you can transfer money to your friends and family as well as use it to make payments at stores and other businesses. NPCI was formed in 2009 with the aim of unifying and integrating the country’s online payment mechanisms. In 2016, after years of development, UPI was finally released to the public. Over the years, new features like the ability to pre-authorise transactions, set up recurring payments, and improve access on feature phones were gradually added to the payments system. Since its introduction, UPI has solved several problems that are associated with paper money. One of the biggest issues that this system has tackled is that of black money. Due to the transparency and traceability of UPI transactions, it has become hard for people to carry out illicit transactions via UPI, especially with large sums of money. Looking at the huge success of the UPI system, many countries have taken inspiration and planned on making their own payment systems. In fact, countries such as Singapore, UAE, Bhutan, Nepal, Malaysia and others have already started accepting cross border UPI transactions by partnering with the RBI and NPCI.
10 Feb 2022
Akshat Bhatnagar
