UPI Payments - Its Effect on the Indian and International Market
Learn how a payments system from 2010 in India is taking over the international market and how you can capitalize on this rising market.
It was only back in 2010 when India introduced immediate online bank transfers but has now catapulted itself into becoming one of the world's most sought-after payments infrastructure with its seamless integration with both government and private banks and companies and real-time transactions.
India keeps trying to find more convenient ways for its users to embrace online banking and move one step closer to an all-digital payments system, like introducing more easy payment methods like UPI, Contactless Payments, UPI Lite, FASTag, Rupay, and even the E-Rupee... Okay...we don't talk about that one...
UPI (Unified Payments Interface)
With the introduction of UPI, online banking has not only become convenient but mainstream as well, so much so that UPI amounted to 52% of India's total transactions in 2022. It has played a vital role in bringing more Indians to accept online payments, this is thanks to its accessibility, not only a UPI account be used in NPCI's official app - BHIM, it can be used in different apps like Paytm, Amazon Pay and more!
Most people prefer to use Google Pay, PhonePe and Paytm for UPI transactions because of their brand recognition and cashback offers (when you complete a transaction or send money to a friend you receive a scratch card with rewards from money of 5-50 rupees to coupon codes)
There is also the official NPCI app called BHIM. What it lacks in rewards it makes up in stability. when compared to other UPI apps, BHIM is more stable. This is important because more than 69.96 million transactions have been declined or failed because of issues with banks' or NPCI's servers.
To tackle failed payments, India introduced a new subsystem to UPI called UPI Lite in September 2022. UPI Lite acts like a digital wallet that can be used to make cashless payments offline and claims to have a higher success rate than standard UPI systems. Since this is fairly new we are yet to see how this will perform. UPI also introduced UPI through SMS so that feature phones can also take advantage of UPI Payments.
This year, NPCI also introduced a new subsystem of UPI called UPI Global that allows UPI users from around the world to send money to each other. Right now this is only useable between Singapore and India, but we hope to see it in more countries in the coming future. UPI is currently available as a payment method for Indian tourists in Singapore, Malaysia, Thailand, Philippines, Vietnam, Cambodia, Hong Kong, Taiwan, South Korea, and Japan. UPI is set to come to the UK through PayXpert in the near future.
Drawbacks of UPI
Even though UPI payments have improved a lot since its conception in 2016, it still sometimes faces failed payments. UPI is still in its infancy and has not reached maturity for international payments like its Indian counterparts like IMPS and NEFT. While UPI has made digital payments more accessible and convenient for many people, there is still a significant portion of the population that does not have access to smartphones or reliable internet connectivity, making it difficult for them to use UPI.
Furthermore, while UPI has brought about a lot of convenience and efficiency in the payment system, there are still concerns about security and fraud prevention, especially as more and more transactions move online. It is important for UPI and other payment systems to continue to improve their security measures and educate users on safe practices to prevent fraud and ensure the safety of their money. For starters, here's a video that is advertised online to rise awareness of UPI fraud.
UPI Autopay
UPI Autopay is another subsystem of UPI that allows you to set up automatic recurring payments for things like your phone bill, insurance premiums, and more! No more worrying about remembering to make payments - UPI AutoPay takes care of it all for you! All you have to do is link your bank account, register for the service with your UPI app, and select the services or bills you want to set up automatic payments for. You can even manage and cancel your UPI AutoPay transactions through the app if you need to make changes.
Overall, while UPI has made significant strides in transforming the payment landscape in India, there is still room for improvement and growth. As technology continues to evolve, it will be interesting to see how UPI and other payment systems adapt and innovate to meet the changing needs and demands of consumers.
If you live out of India and would love to collect recurring subscription payments from your Indian customers through UPI or if you are a business in India that wants to sell your product internationally, feel free to leave your email in our chat to register interest and we'll notify you as soon as we have UPI ready to go! Until we have UPI implemented, feel free to test out our features for free and create your own subscription for your customers.