UPI: the Mitochondria of Fintech
How UPI has shaped the economy into a gargantuan foundation of Payments Tech which is accelerating the cash flow in India
Fintech from the word itself can give the readers a basic idea of what it is all about. Yes, we are talking about Financial Technology where businesses use IT or software technologies to provide financial services to the users. The modern-day technology available in the market, especially those with IT features, can be improved for automating Financial Services.
One example is there, which you probably are using every day to make payments as big as academic fees to bills you pay to a street vendor these days in urban established cities.
Financial Technology, especially in these two years while the pandemic was on its surge, has proven beneficial in making transactions easy, possible, and safe. This innovative and fast progress has changed how we manage our Finances.
UPI: An Easy Payment Options
One example is there, which you probably are using every day to make payments as big as fees to those you pay to a street vendor these days in urban established cities. Financial Technology, especially in these two years while the pandemic was on its surge, helped make transactions easy, possible, and safe. This innovative and fast progress has changed how we manage our Finances in the real world.
One absolutely workable, excellent, and in trend service provider for the same is what you know as UPI, which is Unified Payments Interface. According to the data, which the Central Bank recently published, it is evident that the transactions made through such digital platforms as overall credit transfers in December last year rose to 20% in value and around 77% in volume. If we look at UPI progress only, it alone rose to 98% of the total transfers in value and 104% in volume, according to the published data.
The past three years have been revolutionary for the UPI payments, growing around 234 percent CAGR (37x). The credit for the same could probably be shared with the pandemic as it forced people to opt for digital services rather than going out, doing all the same traditional stuff. One of the many reasons behind the immense success of UPI is the convenience it provides for the users. It is easy to operate and learn for the newbie on such platforms because here, you may not need to know exactly the account no. of the second party to whom the transaction has to be made, a simple QR scan would do it for you.
It is also preferred over bank transfers because banks often levy some money around ₹2 to ₹3 in India as a transaction fee. This concept is not all there when we talk about UPI and the secured payments made through the platform.
UPI Payment Sector is Booming
Many experts in Banking services have claimed that the UPI platform is still growing and going strong when convenience and profit are preferable among the customers or users. In fact, according to the statistics, UPI’s Market share of digital payments actually made massive growth in terms of percentage from 8.1 % in the January of 2020 to about 20 percent in January 2022. This growth is indeed commendable.
UPI can be an excellent example for the modern Fintech sector operating. The Sector is known to be dealing with B to C services using the Internet to provide Financial Assistance and do the transaction smoothly. In the last decade, more apparently in these 4-5 years, we have seen how the use of Information Technology has generated remarkable changes in the financial Service Sectors.
As we know that the only motto or goal of technology is to provide humans ease at doing things and make their lives better. UPI, in recent years, has gained a lot of trust from the customers and is the only reason it is still growing at a pace unimaginable.
When you use UPI, your security and privacy concerns are taken very seriously, and thus, you will notice how your card information is not shared with merchants. It ensures you a shield for any leaks made through the merchants’ side if it happens any time in the future.
One way UPI has made Fintech more modern and revolutionary in its features is by making hassle-free approach and safe registration easy at the same time. All that a user needs is to validate the UPI account by giving your Aadhar and mobile verification authentication.
Indians primarily have an intense fear of Fraud, and they do not really want to do things that can blow their long time savings. This fear makes them choose rather online services, which provide enough evidence and are quick to trace. Additionally, mobile is something which almost everyone in the country carries. It becomes easy for them to adapt to the technology and to operate significantly.
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