Digital UPI payments in India have revolutionized the way people conduct financial transactions, offering a seamless, fast, and secure method for transferring funds. Unified Payments Interface (UPI) has gained massive popularity due to its ease of use, allowing users to make payments directly from their bank accounts using mobile phones. This digital payment system has empowered individuals, businesses, and even government services, making financial inclusion more accessible and efficient across the country. With the rapid adoption of UPI, India has emerged as a global leader in digital payment solutions.
History of UPI in India
BHIM UPI (Bharat Interface for Money) was the first UPI app in India, this application was created by the National Payments Corporation of India, and the purpose of making the application was to provide e-payments facilities to encourage cashless transactions. People found it easy because of time efficiency and transactions were done successfully within a few seconds.
One citizen makes only six non-cash transactions on a regular basis, although 10 million merchants accept card payments. No banking of any kind is available to almost 145 million families. The handling of hidden money and the widespread defiling of genuine money are further problems. Since 1st January 2019, UPI became a well-known payment option and the transaction limit was allowed from 1,00,000 to 2,00,000 in March 2020. Once again Reserve Bank of India increased the limit to 5,00,000 for the Retail Direct Scheme and IPO applications, multiples facilities were provided by RBI like a cardless cash withdrawal facility from ATMs using a UPI-based QR code.
Benefits of Digital Payments
Advantages can be numerous, UPI digital payments have been widely spread in each city and state of India, and speed transactions are done which is helpful for both seller and the customer. Online payments save a lot of time, if we think about the old times we followed waiting in lines, and take time to write checks, people faced many challenges with their own money for example – waiting for banks to clear their checks so that they can have access to their own money. However, the time has changed and the digital payment method has eliminated the old rules.
Individuals have benefits wherein they can pay for any goods and services whenever of the day from any region of the world. It is simpler to click an element on your cell phone than to gather the right measure of money for your buy.
As a study, a percentage of 56% of shop-owner prefer online payment options as they find it easy to manage their bank transactions.
Indian business has online payment option which can benefit their supply chain – distribution channels, Customer experience matters when it comes to the business, nowadays customer feels more advantageous to buy, and customer satisfaction will help the business grow.
Your money and other financial information are simpler to manage and store when you use online payments. There are numerous tools on the internet that can assist with transactions for both customers and sellers. You can let the tools manage your funds instead of having to keep track of them yourself. Things get easier because you don’t have to carry cash or credit cards.
Subscription markets are now easily operational because of online payments. People used to regularly make cash or credit card payments in the past. Nowadays, consumers don’t need to actually remember to pay or make the effort to travel far to the actual place of business to make their payments because those processes are automated. Due to this, it is now simpler for both the merchant and the client to accept and receive payments.
The downside of Digital payments
Like any other technology-dependent software, online payments are susceptible to technical issues or downtime, gateway issues can cause frustration among the customers and the merchants, to avoid transaction failures we must have a strong internet connection.
There is a good risk that an online portal can access your personal data or bank account information if you are a registered user and often utilize online payments. Even if one-time passwords (OTPs) are used for the majority of transactions, some circumstances call for password protection. You could be in danger of a privacy violation, especially if you work with several institutions.
One of the major difficulties of online payments is the fact that many consumers, especially the elderly population, lack basic computer literacy. They avoid using online payment methods because they lack sufficient knowledge of how to use technology and devices. Many of them continue to use traditional payment methods because they are afraid of the difficulties involved. This is a significant disadvantage for emerging nations like India.
In contrast to actual transactions, it is impossible to verify if the person making an online payment is who they say they are. The majority of online payments are made anonymously because there are no verification techniques like photos or signatures. This has the potential to significantly increase forgeries and identity theft.
Final thoughts
Digital payments are causing numerous changes in the e-commerce industry. It is pretty much expected of you to offer online payment alternatives as a business owner and a client.
Online payments have their own set of drawbacks that you need to be aware of, despite the fact that they are generally thought to be favourable for many obvious reasons. After all, in the modern digital environment, every useful function carries a small amount of risk. Most of these drawbacks are manageable with the right care and management.
