The National Payments Corporation of India (NPCI) supervises and manages the UPI infrastructure, assuring its efficiency and scalability. With affordable handsets and data bundles, UPI services are now accessible to rural populations. Demonetisation in 2016 contributed to the rise of UPI.
The government’s unrelenting push towards a cashless economy. UPI has been the favored choice for millions due to its capacity to transact 24/7 and its better security features. The UPI cashback has also helped significantly in the use of UPI apps.
With more UPI transactions, the NPCI may explore boosting transaction limits and amounts in the coming days. The NPCI has enabled banks to establish transaction limits. There are several key plates of the UPI market. All of these players are discussed here.
Key players of the UPI market:
- P2P and P2M
Payments have shifted from person-to-person (P2P) to person-to-merchant (P2M) as merchants use it more frequently.
- Rural Adoption
As widely assumed, UPI is not limited to metropolitan regions. Rural UPI use is rapidly increasing due to targeted and localized solutions.
- Micro-Transactions
One notable trend is the rise of micro-transactions (payments under ₹100), which include food, utility expenses, and public transportation.
- Recurring Payments
UPI money transfer AutoPay facilitates recurring payments for subscriptions, loans, and insurance, leading to increased daily transaction volumes.
Challenges Faced by UPI:
Despite its success, UPI faces a number of challenges:
- Technical Issues: The high number of daily transactions might burden systems, resulting in outages or failed transactions through UPI ID.
- Fraud & Fraud: As with any digital platform, unauthorized UPI download is susceptible to phishing, fraudulent applications, and other frauds. Educating users about these risks is critical.
- Digital barrier: While use is increasing in rural regions, a large digital barrier still prevents universal UPI access.
- Merchant Charges: The debate about charging merchants for UPI transactions may influence the company’s growth trajectory.
The future trends of UPI:
UPI is expected to attain much more success based on its current track. Some projections for the future are as follows:
- International Growth. UPI’s expansion into overseas areas has already begun. Countries such as Singapore and the UAE have already begun to accept UPI payments from Indian travelers and residents.
- Increase in Transaction Volumes Based on current trends, UPI is likely to manage more than 250 million users. With these advances and a larger user base, estimated daily UPI transactions might reach 1 billion by 2030.
- Adoption of Future Technologies. Blockchain and artificial intelligence technologies have the potential to improve the productivity and security of UPI.
- Adding Functionalities NPCI wants to introduce UPI credit and UPI offline payment functionalities, which will serve a broader audience and use cases.
UPI relies on numerous actors behind the scenes to function and flourish effectively. The National Payments Corporation of India (NPCI) supervises and manages the UPI infrastructure, assuring its efficiency and scalability. Banks play an important role in the UPI ecosystem by facilitating transactions between accounts. Banks like as SBI, HDFC, ICICI, and Axis Bank process millions of UPI banking payments daily.