UPI (Unified Payment Interface) offers several advantages over other digital payment systems in India.
Here are some key advantages of UPI:
Easy and Instant Transfers: UPI provides a seamless and instant transfer of funds between bank accounts. Users can send or receive money instantly without any delays, even outside regular banking hours. This real-time transfer capability sets UPI apart from other digital payment systems that may have longer processing times.
Single Platform for Multiple Banks: UPI allows users to link multiple bank accounts to a single UPI ID. This eliminates the need to switch between different payment apps for different bank accounts. With UPI, users can access and manage multiple bank accounts from a single app, providing convenience and streamlining the payment process.
Simplicity and User-Friendly Interface: UPI apps are designed with a user-friendly interface that makes it easy for users to navigate and perform transactions. The process of sending or requesting money through UPI is simple and requires minimal inputs, such as the receiver's UPI ID or mobile number. This simplicity has contributed to the widespread adoption of UPI across various user segments.
Universal and Interoperable: UPI is universal and interoperable, meaning users can transact with any other UPI user regardless of the UPI app they are using. This eliminates the need for both the sender and receiver to be on the same platform or have the same payment app. UPI's interoperability ensures convenience, allowing users to make transactions with a wide range of merchants and individuals.
Secure and Authenticated Transactions: UPI incorporates robust security measures to ensure the safety of transactions. It uses two-factor authentication, including the UPI PIN, to authorize payments. The UPI PIN is known only to the user and acts as a secure layer of authentication, adding an extra level of protection to prevent unauthorized transactions.
QR Code Integration: UPI has integrated QR code functionality, which enables quick and convenient payments. Merchants can generate QR codes that customers can scan using their UPI app to make payments. This makes the payment process efficient, eliminates the need for cash or physical cards, and promotes digital transactions.
Integration with Various Services: UPI goes beyond peer-to-peer payments and integrates with a wide range of services. Users can make bill payments, book tickets, recharge mobiles, and even shop online using UPI-enabled apps. The integration with different services expands the utility and versatility of UPI, making it a comprehensive digital payment solution.
Financial Inclusion: UPI plays a crucial role in promoting financial inclusion by enabling users to transact digitally, even without a physical bank branch. UPI apps can be accessed through smartphones, and in some cases, through USSD codes for feature phones. This empowers individuals, including those in rural areas, to participate in the digital economy and access financial services easily.
These advantages of UPI have contributed to its rapid adoption and popularity among users in India.
The simplicity, speed, security, and interoperability of UPI make it a preferred digital payment system for both individuals and businesses.
Here is another take on advantages of UPI:
Advantages of UPI over other digital payment systems in India:
UPI is the most widely used digital payment system in India, with many consumers preferring it over other options1.
UPI allows even small business owners such as street vendors to start accepting digital payments without the need for a Point of Sale (POS) machine, making it more accessible for people in India2.
UPI is free of charge for both customers and sellers, making it a cost-effective option3.
UPI is a real-time payment system that enables instantaneous transactions, saving time for users4.
UPI has the potential to be a major facilitator of financial inclusion in India, enabling a large portion of the population to engage in the digital economy2.
UPI promotes competition among fintechs and banks, which can benefit consumers and retailers1.
UPI has lower fees for traders compared to credit cards1.
UPI has eliminated the need for transacting parties to know complicated payment credentials, making payments more convenient and transparent for all parties involved2.
UPI has the potential to stimulate new economic activity and increase the flow of capital5.
References: 1 economist 2 ibef 3 lemonde 4 hdfcbank 5 bai