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UPI transactions witness a big boost with the digitization wave in the pandemic

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UPI transactions witness a surge in transactions
UPI transactions witness a surge in transactions, Photo by David Dvořáček on Unsplash

Unified Payment Interface (UPI)—a system that empowers multiple banks into a single mobile application—was first launched in April 2016 in India. UPI’s front end interface is provided by digital wallet platforms like Google Pay, Phone Pay, and Paytm. This sizeable platform will spread its branches globally to other countries after considerable success seen recently.

In August 2020, the number of transactions on UPI equaled 1.6 billion. Advancing further on November 1, 2020, the National Payments Corporation of India (NPCI) released a statement showing a data report exhibiting 2.7 billion transactions in October 2020. In comparison to the figures for August, October month has shown twice multiplication in the numbers.

In November 2019, this platform crossed about 1 billion transactions, with 174 banks “Live” on this channel. From the time of UPI’s launch in 2016, this is the first time that such a surge in transactions has been witnessed. Now, this seamless fund routing and merchant payment system is home to more than 2 billion transactions.

The reason behind the rush in the volume of transactions

The Covid-19 pandemic contributed to a change in consumer buying behavior; more than 80% of consumers buy through online platforms, as The Financial Express published. The adoption of digital payments also brought in first-time users from March 2020.

Besides this, the online shopping trends also fueled online sales on e-commerce platforms like Amazon and Flipkart. Other prominent reasons behind this are enticing discounts and festive sales during the September-October season. These incentives helped the UPI payment platform even outshine the collective transactions by debit and credit cards.

Further, it has taken over as the billing system for IPOs and other bill payments recently. These specialized-use cases have erupted vast volumes of transactions for the UPI system in the pandemic.

UPI is planning to be exported to global countries after the worldwide recovery of consumer demand. In a statement, NPCI mentioned that UPI would be shipped to international markets like Singapore, UAE, and Myanmar shortly.

However, a silver lining to this is that surge in innumerable transactions has also fueled transaction failures. In early October, Economic Times submitted a report that mentioned that first-time users had difficulty adapting to online payment systems. This further led to transaction failures at a broad level for less financially educated people.

As per the RBI report, if these challenges are subdued, the UPI platform will be a retail railroad for the world with enormous transactions on its way.

An avid learner having infatuation for numbers and finance. Also, an individual with unfiltered opinions who likes to mix the metrics of both professionalism and creativity.

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