UPI at a Decade (Economy)
UPI at a Decade (Economy)
Why In News:
UPI (Unified Payments Interface) completes a decade since its 2016 launch by the National Payments Corporation of India (NPCI).
What is UPI?
Unified Payments Interface (UPI) is an instant, real-time and interoperable payment system developed by the National Payments Corporation of India (NPCI).
It enables Person-to-Person (P2P) and Person-to-Merchant (P2M) transactions through mobile devices, without requiring users to repeatedly share bank-account details.
Transactions can be initiated using a Virtual Payment Address (VPA), mobile number, QR code or other supported identifiers.
UPI has become a major component of India's Digital Public Infrastructure (DPI) and supports the broader JAM (Jan Dhan–Aadhaar–Mobile) framework for financial inclusion.
Key Features and Extensions
UPI 2.0: Introduced enhanced features such as overdraft-account linking, invoice-in-inbox and signed QR codes, expanding the functionality of digital payments.
UPI Lite: Enables small-value transactions with simplified processing, particularly useful where connectivity or transaction speed is a constraint.
UPI123Pay: Allows feature-phone users to make UPI transactions through multiple channels without requiring a smartphone or conventional internet access.
UPI Circle: Enables delegated payments, allowing a primary user to authorise another person to make payments from the primary user's bank account within defined limits.
Internationalisation of UPI
UPI has expanded beyond India and is operational in multiple countries, including UAE, Singapore, France, Sri Lanka, Mauritius, Bhutan and Nepal.
The India–Singapore PayNow–UPI linkage, launched in 2023, enabled real-time cross-border transfers between the two payment systems.
This international expansion seeks to facilitate faster, cheaper and interoperable cross-border payments, particularly for remittances and retail transactions.
National Payments Corporation of India (NPCI)
NPCI is an umbrella organisation for operating retail payment and settlement systems in India, established as an initiative of the RBI and Indian Banks’ Association (IBA) under the Payment and Settlement Systems Act, 2007.
It operates major digital-payment systems including UPI, RuPay, IMPS, NACH, FASTag (NETC), and Aadhaar Enabled Payment System (AePS).
NPCI plays a key role in strengthening India's Digital Public Infrastructure (DPI) by promoting interoperable, secure and accessible digital payments across the country.