UNIFIED PAYMENTS INTERFACE (Syllabus: GS Paper 3 – Economy)

News-CRUX-10     27th November 2023        

Context: Recently, the Prime Minister of India encouraged citizens to abandon cash transactions and embrace digital payments as part of the government's ongoing push towards a digital economy.

  • UPI transactions are gradually becoming more widespread across the country, and cash in circulation is finally seeing a decline.

Unified Payments Interface UPI

  • About: UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. 
  • Developed by: National Payments Corporation of India in 2016.
  • Participants in UPI: Payer Payment Service Provider (PSP), Payee PSP, Remitter Bank, Beneficiary Bank, NPCI, Bank Account holders, and Merchants.
  • Global Recognition of UPI: UPI had already established itself in countries like Singapore, Bhutan, Nepal, and the UAE.
  • International Adoption of Indian Payment Systems: France, UAE, Saudi Arabia, Bahrain, Singapore, Maldives, Bhutan, and Oman.

Benefits of UPI

  • Single-click Two Factor authentication
  • Universal Application for transaction
  • No risk of storing customer’s virtual address like in Cards.
  • Safer, Secured and Innovative
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