India has recently celebrated five years since the successful launch of UPI in 2016. During this time, this inclusion has first made a benchmark with its first billion transactions in October 2019. UPI payment has been a major contributor to the revolution India has seen in the field of digital transactions.
Demonetization and COVID-19 are the two major reasons due to which the concept of an online payment system has boomed. The demonetization period was the new-technology era, as a huge number of people, who possessed a smartphone, were using digital payment methods. However, many people were not familiar with the term UPI payment (Unified Payment Interface), especially those without smartphones. In the following article, we have discussed how UPI payments have brought about a change in the digital economy of India with one of the most trusted online payment systems – Zaakpay.
Reasons Why UPI in India is Advancing
- UPI payment has made the process of real-time payment easier with the help of time-saving transactions. In October 2021, the amount of UPI transactions had reached an all-time high in the last five years, amounting to 7.71 lakh crores.
- During recent times, Internet connectivity has seen a boom in the country, allowing every customer easy access to online shopping and digital transactions. This connectivity boom has given rise to people becoming comfortable with spending money digitally by using the facility of UPI payment.
- As soon as demonetization hit India, people could make digital transactions in every instance in their lives. UPI payment was a blessing for people who had resorted to making digital payments in their everyday lives.
- The pandemic is another reason for the advancement of UPI payment. With the inclusion of masks and social distancing in the new normal, physically exchanging currency has become a viral risk. Most people in India have started to make digital payments through an online payment system. This is due to the safety and risk-free nature of digital transactions, which are extremely reliable amongst customers.
- The initiative of cashbacks and rewards has attracted a huge number of customers and has helped in converting guest customers into loyal ones.
Changes Brought By UPI
Since its launch, UPI has brought a revolution in India’s online payment system in three sectors:
- Government Sector: The initiative of Digital India was launched mainly to challenge the subconscious resistance among the pre-existing users of NEFT/RTGS. One of the most important reasons for this was to eliminate the complexity of remembering account numbers, IFSC codes, and Net Banking passwords. Government schemes such as DBT (Direct Benefit Transfer) and Jan Dhan Yojana have adopted the UPI framework. As per the reports, there has been a decrease in the number of faulty transactions, as customers do not have to enter multiple credentials in the form of user IDs and passwords.
- Education and Healthcare Sectors: Before the introduction of UPI, or any other online payment system, transactions in healthcare and education sectors were cash-oriented. The most significant problem was that the merchant had to wait for a long time before the payment could be made. Apart from this, there were high chances of financial fraud, that is, regulation of fake currency, which led to the loss of revenue. Upon adopting UPI payment systems, these sectors were able to keep track of transactions and verify their customers.
- Business Sector: From a small grocery shop to million-dollar businesses, every industry has switched to UPI payment, as it reduces the friction of online payments. This has ultimately provided businesses with unprecedented levels of growth. UPI has given the customers the benefit of making contactless payments with ease. The more businesses are getting involved in the digital payment ecosystem, the more they will grow.
Benefits of UPI Payments
A UPI payment gateway like Zaakpay gives you the following benefits:
- It is the most hassle-free payment method, as it allows customers to pay from anywhere and anytime through mobile phones.
- All the bank accounts can easily be linked with a UPI ID.
- It allows settling funds in real-time.
- It reduces the time taken during the checkout process by providing a high-speed payment processor.
- It gives out transaction alerts to the customer for any payment via messaging applications, like WhatsApp, SMS, etc.
- It provides QR-enabled UPI to facilitate contactless payment.
- It carries no transaction charges.
- Attracting customers who want to pay via cards by allowing them to pay through UPI QR codes.
- Provides two-factor authentication and data encryption for a better experience for your customer.
How to Set up a UPI Account?
You have to follow the following steps to set up a UPI account:
- Go to the Play Store and install any payment application having the UPI payment feature.
- Use your mobile number (linked with your bank account) to register.
- You will be given the option to choose the bank name.
- You need to set a PIN code, which you would need to access the app.
- To verify your bank account, your bank will send you a verification code.
- Once you enter the OTP sent by your bank, your virtual payment address will be created.
It is better to use a simplified UPI payment solution for your business. For an easy and smooth transaction via payment gateways like Zaakpay, all you need to do it:
- Generate a UPI payment link with payment details from the merchant dashboard.
- Send a message through any messaging application like WhatsApp or SMS.
- Once the customer clicks on the link, they will be redirected to the payment page with the amount reflected on it.
- To authenticate the payment, the customer needs to enter the UPI ID and MPIN.
Real-time payment methods have been a blessing for India’s economy. Today, India is one of the fastest-growing financial economies globally. The cheaper internet, cashback, rewards, and offers are the major factors that drive the Indian digital economy by attracting consumers. Introduction to the online payment system facility has made COD more comfortable for the consumers who want to pay at the time of delivery.