PROJECT REPORT ON

“A review on UPI- Advancement in Payment Systems”

TYBFM (SEMESTER VI)

ACADMIC YEAR: 2021-2022

SUBMITTED BY
KRISH VIJAN (ROLL NO. 140)

PROJECT GUIDE
DR. SHWETA SINGH

H.R. COLLEGE OF COMMERCE AND ECONOMICS VIDYASAGAR PRINCIPAL

K.M. KUNDNANI CHOWK 123,
D.W. ROAD, CHURCHGATE, MUMBAI – 400 020.
2021-2022

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 CERTIFICATE

This is to certify that Mr. Krish Vijan student of H.R. College of Commerce & Economics studying in
T.Y.B.F.M (Semester VI), have successfully completed in India supported by Case Studies in the academic
year “2021-2022”. The information submitted is true and original to the best of the knowledge.

___________________________ ____________________________
(Signature of Project Guide) (Signature of Principal)

_____________________________ ____________________________
(Signature of Internal Examiner) (Signature of External Examiner)

II
 ACKNOWLEDGEMENT

We acknowledge the value assistance provided by H.R. College of Commerce & Economics, for three-year
degree course in B.F.M.
We specially thank the Principal Prof Pooja Ramchandani and the project guide Prof SHWETA SINGH for
guiding me in the right direction to prepare the project and giving their valuable time, knowledge and
guidance to complete the project successfully. Our family and friends were a great source of inspiration
throughout my project, their support is deeply acknowledged.

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 DECLARATION

Mr. Krish Vijan the students of H.R. College of Commerce & Economics, studying in T.Y.B.F.M. (Semester
VI), hereby declare that we have completed the project report on “A review on UPI- Advancement in
Payment Systems” in the academic year 2021-2022.
The information submitted is genuine and practical to the best of my knowledge.

Date: February 2022

Place: H.R. College, Mumbai

NAME: -
Krish Vijan (ROLL NO. 140)

IV
 TABLE OF CONTENT

SR. NO. TOPIC PAGE

NO.
1 INTRODUCTION 7

2 OBJECTIVE OF STUDY 9

3 HYPOTHESIS OF THE STUDY 10

4 SCOPE OF STUDY 11
SELECTION OF PROBLEM 12

5 LIMITATIONS OF STUDY 13

6 DATA COLLECTION METHODS 14

7 PRIMARY RESEARCH 14

8 TYPES OF PRIMARY RESEARCH 15

9 SECONDARY RESEARCH 16

10 TYPES OF SECONDARY RESEARCH 17

11 SOURCES OF DATA 18
QUANTITATIVE DATA
12 QUALITATIVE DATA 19

13 METHODS OF SAMPLING 20

14 STATISTICAL REVIEW 23

15 LITREATURE REVIEW 24

16 ARTICLE 1 24

17 ARTICLE 2 26

18 SECONDARY DATA 29
CHAPTER-1
INTRODUCTION
19 CHAPTER-2 37
WHY ARE SMARTPHONES IMPORTANT

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20
20 CHAPTER-3 41
ADVANTAGES AND DISADVANTAGES
OF SMARTPHONE
21 CHAPTER -4 45
POPULAR SMARTPHONE BRANDS
IN INDIA
22 CHAPTER -5 56
USES OF A SMARTPHONE
23 CHAPTER -6 59
THINGS TO REMEMBER WHILE
BUYING A SMARTPHONE
24 DATA ANALYSIS AND INTERPRETATION OF 63
QUESTIONNAIRE
25 CASE STUDY 76
26 CONCLUSION 80

27 BIBLIOGRAPHY 81

28 APPENDIX 83

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 Introduction
A Unified Payment Interface (UPI) is a smartphone application that allows users to transfer money between
bank accounts. It is a single-window mobile payment system developed by the National Payments
Corporation of India (NPCI). It eliminates the need to enter bank details or other sensitive information each
time a customer initiates a transaction.

The Unified Payment Interface is a real-time payment system. It is designed to enable peer-to-peer inter-
bank transfers through a single two-click factor authentication process. The interface is regulated by
the Reserve Bank of India (RBI), India's central bank. It works by transferring money between two bank
accounts along with a mobile platform.

The system is said to be a safe and secure method of transferring money between two parties and eliminates
the need to transact with physical cash or through a bank. The pilot system was launched in India on April
11, 2016. Banks across the country started to upload their interface in August 2016.

Working of Unified Payments Interface (UPI)

UPI uses existing systems, such as Immediate Payment Service (IMPS) and Aadhaar Enabled Payment
System (AEPS), to ensure seamless settlement across accounts. It facilitates push (pay) and pull (receive)
transactions and even works for over-the-counter or barcode payments, as well as for multiple recurring
payments such as utility bills, school fees, and other subscriptions.

Once a single identifier is established, the system allows mobile payments to be delivered without the use
of credit or debit cards, net banking, or any need to enter account details. This would not just ensure greater
safety of sensitive information, but connect people who have bank accounts via smartphones to carry out
hassle-free transactions.

Overall, UPI implies fewer cash transactions and potentially reduces the unbanked population.

Sending Money vs. Receiving Money

Sending money on the UPI is called a "push." In order to send money, the user logs into the interface and
selects the Send Money/Payment option. After entering the recipient's virtual ID and the amount desired, he
chooses the account from which the money will be debited. The user then enters a special personal
identification number (PIN) and receives a confirmation.

1
Receiving money through the system is called a "pull." Once the user has logged in to the system, she
selects the option to collect money. The user then needs to enter the virtual ID for the remitter, the amount
to be collected, and the account in which she will deposit the funds. A message then goes to the payer with
the request to pay. If he decides to make the payment, he enters his UPI PIN to authorize the transaction.

Once the transfer has been completed, both the sender and the recipient receive a confirmation by text
message to their smartphones.

Example of Services Offered by UPI

A number of key features are offered by UPI. Users can access balances and transaction histories along
with sending and receiving money. To send money, users need an account number, the Indian Financial
System Code (or IFSC, which is an alphanumeric code that facilitates electronic transfers), the mobile
number of the recipient, and a virtual ID or Aadhaar number (which is like a Social Security number).

The main objective of a unified system is to offer an architecture and a set of standard APIs to facilitate the
next generation online immediate payments leveraging trends such as increasing smartphone adoption,
Indian language interfaces, and universal access to Internet and data.

The following are the some of the key aspects of the unified payments interface:

1. The unified payment interface is expected to perform easy instant payments via mobile, web and other
applications.

2. The payments can be initiated by both payer and payee and are carried out in a secure, convenient and
integrated fashion.

3. This design provide an ecosystem driven scalable architecture and a set of APIs taking full advantage of
mass adoption of smartphone.

4. Capabilities include virtual payment addresses, 1-click 2- factor authentication, Aadhaar integration, and
use of payer’s smartphone for secure credential capture.

5. It allows banks and other players to innovate and offer a superior customer experience to make electronic
payments convenient and secure.

6. Supports the growth of e-commerce, while simultaneously meeting the target of financial inclusion.

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 RESEARCH METHODOLOGY

OBJECTIVES OF THE STUDY

The main objectives of this study are:

1. To understand the UPI mechanism and it’s working.

2. To understand it’s impact on daily transactions made by individuals in India.
3. To understand how UPI has changed financial behaviour of sellers and buyers.
4. To understand the impact UPI has brought in a digital revolution in the banking sector in India.
5. To find out the pros and cons of using UPI.
6. To understand how lockdowns and covid preventive measures subliminally promoted UPI.
7. To identify the variance between UPI services and traditional services.

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 HYPOTHESIS OF THE STUDY

Hypothesis is a testable prediction which is expected to occur. It can be a false or a true statement that is
tested in the research to check its authenticity. The hypothesis should be clear and precise. It should be
limited in scope and must be specific.

There are two types of hypothesis, they are:

• Null Hypothesis (Ho)

• Alternate Hypothesis (Ha)

Following are the hypothesis of the study:

Ho: There is no impact of UPI in customer satisfaction.

Ha: There is an impact of UPI in customer satisfaction

Ho: There is a no variance between customer perception towards UPI services and traditional services.
Ha: There is a variance between customer perception towards UPI services and traditional services.

Ho: More of older generation use UPI as a mode of payment.

Ha: More of younger generation use UPI as a mode of payment

Ho: There is no change in consumer spending due to UPI.

Ha: There has been an increase in the consumer spending due to UPI.

Ho: There has been an increase in cyber scams after the introduction of UPI.
Ha: There has been no increase in cyber scams after the introduction of UPI.

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 SCOPE OF THE STUDY

1. The scope of research extends to understand the impact of UPI on individuals and institutions
through a detailed survey.
2. To understand how UPI has made online and offline payments more convenient for customers as
well as the businesses.
3. To understand the impact of UPI on banking and Fintech.
4. To study the advantages that UPI has and how it has changed the thinking of individuals with
respect to money.
5. To understand the disadvantages of UPI.

SELECTION OF PROBLEM

This project aims at undertaking a comprehensive study on how UPI is changing consumer behavior and
how introduction of UPI has made accounting simpler, and how UPI has promoted digital banking in a
massive way.

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 LIMITATIONS OF THE STUDY

➢ The sample size was limited to 100 respondents.

➢ The sample was taken from the population residing in India only. The results are not applicable to
the whole world.

➢ The paucity of time and resources was a major constraint.

➢ My research is biased towards citizens in the metropolitan and urban region and not the rural areas.

➢ The class of people is limited as it does not include people from the lower income level.

➢ The limited knowledge of the respondents regarding the topic may hamper the true conclusion of
the study.

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 DATA COLLECTION METHODS:

There are two types of research that can be carried out for any research. They are as follows:

Primary Research:

• Primary Research is the first-hand information and research, collected for the first time in order to solve the
research problem.
• It is collected by the researcher directly from the original source, i.e., the respondents or the sample
population.
• The research data collected is then analyzed by the researcher in order to draw conclusions and to find a
solution to the research problem.
• Primary research is done through various methods such as Surveys, Questionnaires, Interviews, and
Observations.
• Primary data is useful to researchers as they get relevant information to solve a specific research problem.
• The data collected is more accurate as it is directly collected from the respondents.
• For the purpose of this research projects, Questionnaires have been sent to 100 individuals in order to
understand and analyze their preferences with regards to smartphone brands.
• Due to the many advantages of primary data, it has been selected as a source of data collection for this
research project.

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Types of Primary Research:

1. Observation: Watching how respondents behave provides many insights, but can leave questions
unanswered. It is mainly used in retail markets.

2. Postal surveys: Surveys are sent to the address of potential customers who complete the form and
send back in a pre-paid envelope. It is a relatively cheaper method, and can cover a wide
geographical area while avoiding the potential for interviewer bias.

3. Telephone interview: Telephone interviews allow quicker feedback than a postal survey. However,
potential customers are often wary of being called and may be reluctant to give anything other than
short answers.

4. Online surveys: Online surveys are gaining popularity because they have a relatively low cost, and
are usually used by individuals or small businesses to get information.

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Secondary Research:

• Secondary research is a type of research that has already been compiled, gathered, organized and published
by others. It includes reports and studies by government agencies, trade associations or other businesses in
your industry, or research material published in research reports and similar documents.

• This research data can be made available by public libraries, websites, data obtained from already filled in
surveys etc.

• As secondary data is already available to the researcher, it saves time in collecting the data and then
analyzing it.

• Secondary data may be available free of cost or at a very low cost, which saves the researcher monetary
resources.

• Various research papers and articles and blogs have been examined in order to conduct the research on the
customer preferences and behaviour about smartphone brand.

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Types of Secondary Research:

1. Online Information: Information available through various websites, articles and blogs.

2. Existing Market Research Reports and Papers: Information can be collected from these sources
because these sources have already performed primary research on the research problem and have
found certain solutions for the same.

3. Information from agencies such as industry bodies, government agencies, regulatory bodies, libraries,
etc. is also available to the researcher for conducting a thorough analysis.

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SOURCES OF DATA:

Quantitative Data:

• Quantitative research is the use of various research instruments such as Surveys, Questionnaires and
Interviews in order to gather responses from various participants who are a part of the sample population.

• The researcher may approach the respondents, and the information or data may be filled directly by the
respondents themselves, or it may be filled on their behalf by the researcher.

• The accuracy and relevancy of data is an advantage of this type of data collection source.

• Survey research is the most popular type of quantitative research method used by researchers.

• In a survey, the researcher poses certain predetermined questions to a sample population of individuals. It
is an extremely useful method of getting data directly from primary sources.

• This method may also be used to give an in-depth study of the research problem, and to receive direct
responses to the research problem at hand.

• Surveys are distributed in various ways, such as via e-mails, postal mails, online, or in person.

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Qualitative Data:

• Qualitative Research is primarily exploratory research.

• Researchers use qualitative research to gain an understanding of underlying reasons, opinions, and
motivations of the sample population.

• It provides insights into the research problem and also helps to develop ideas or hypotheses for potential
quantitative research.

• Qualitative Research is also used to uncover trends in thoughts and opinions, and dive deeper into the
research problem.

• Some common methods include focus groups and group discussions, individual interviews (via phone or in
person) and observations.

• Qualitative data is a source of getting open ended questions answered, which may not be answered in
questionnaires and surveys.

• It gives valuable insight to the researcher on the research problem.

• Data available through research papers also forms a part of qualitative data. In this project, all four sources
have been used by the researcher due to the benefits provided by each of the methods of data collection. This
improves the research and helps to find an optimal solution to the research problem.

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METHODS OF SAMPLING

• For the purpose of this research project, Random Sampling has been used.

• Random Sampling is a sampling technique in which each sample has an equal probability of being chosen.

• A sample chosen randomly which means that there is an unbiased representation of the total population in
the sample.

• If for some reasons, the sample does not represent the population accurately, the variation is called a
sampling error.

• It is one of the simplest methods of collecting samples for analysis of the research problem.

• The sample in this research study consisted of 100 respondents.

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RESEARCH DESIGN

➢ The research design comprised a method of primary data collection using a survey given to 100
respondents. The design also included secondary data expressed through a review of past literature in the
concerned area, indicating that a certain segment of the study was exploratory in nature.

➢ The design used descriptive tools such as pie chart and bar graphs to highlight the data analysis.

RESEARCH INSTRUMENT

The research tool used was that of a survey comprising 13 questions that covered different areas of the
research problem. The questions were multiple choice in nature, closed ended and open ended. It was
compulsory for all 100 respondents to answer all the questions. The survey was anonymous but certain
demographic details such as age and occupation were asked for. The questionnaire made is enclosed in the
annexure.

SAMPLE SIZE

• Sample size is the number of people who have been surveyed for the purpose of the research project, or
those individuals who have submitted their response to be considered as a response to the research problem.

• The sample size for this research study was 100 respondents

SAMPLING UNIT

A decision has to be taken concerning a sampling unit before selecting samples. Sampling unit may be a
geographical one such as state, district, village or a construction unit such as house, flat, etc.

In our research project, the sampling unit consists of respondents who own a smartphone across india.

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SAMPLING DESIGN

The study used the technique of Random Sampling for the survey. Tis refers to a basic sampling design
where a subset of the population is randomly selected to be a part of the sample.

The sample of this study was limited to 100 respondents.

STATISTICAL TECHNIQUE

The study employed the use of bar graphs and pie charts to interpret and express the data in the form of
percentages.

Graphs allow for descriptive secondary analysis of data.

The survey had a total of 100 respondents. The responses to each question were expressed as percentages
and then a pie chart was prepared for each question, excepting a few. For those exceptions a horizontal bar
graph was prepared.

Each graph was accompanied by a key that contained the response options for the specific question and the
color corresponding to each response in the chart.

The graphs allowed for interpretation of the responses from the point of view of which response option had
been chosen by the majority of the respondents versus a minority.

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 LITERATURE REVIEW

Article 1: https://www.fortuneindia.com/enterprise/how-upi-is-making-indias-digital-economy-
boom/105433

How UPI is making India’s digital economy boom

Literature review

In the pandemic when social distancing is the most critical norm, the Unified Payments Interface (UPI) is
like a godsend. The instant real-time payment system has turned out to be the best financial innovation post-
Independence in India and has begun in earnest the process of replacing the cash economy altogether. It has
contributed its might to make the country one of the fastest growing digital economies in the world.

According to the latest data compiled by the National Payments Corporation of India (NPCI), which
manages UPI, it has reported a threefold increase during the last fiscal (2020-21) in both the number of
transactions and the value. As of March 2021, the total volume has jumped to 2,732 million transactions,
worth ₹5,04,886 crore. At the beginning of the fiscal, in April 2020, the total volume stood at 999.6 million
with the total value of transactions at ₹1,51,141 crore.

The number of banks that are live on UPI has gone up to 216 from 153 in April 2020. When the platform
began operations in April 2016, there were only 21 banks on board.

The two leading players—Walmart-owned PhonePe and Google Pay—have continued to dominate the UPI
ecosystem. PhonePe has topped the chart with 43.9% of the total UPI transactions volume, accounting for
1,199.51 million transactions, with a value worth ₹2,31,412 crore. In contrast, Google Pay has mopped up a
35% market share in March, with 957.01 million transactions worth ₹2,01,185 crore. The third largest
player, Paytm Payments Bank, posted 401.16 million transactions worth ₹43,221 crore.

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 Analysis

UPI has played an integral part in making Banking and Financial transactions seamless and easy to execute
in the new Digital India. All retail stores as well as small and large businesses have adopted UPI and
companies like BharatPe and PhonePe have been at the forefront of the new UPI revolution. UPI has
promoted ease of business through its seamless and easy to use payments interface. The transaction time that
used to be a few days has now radically dropped down to a few seconds due to UPI. B3cause of Lockdown
every single household was able to make contactless payments for everything right from their daily
essentials like groceries to electronics and other luxury purchases. UPI has become a notable innovation
Financial Technology and is an example of leading innovation for the entire world.

Article 2: https://www.thehindubusinessline.com/money-and-banking/phonepe-launches-upi-based-
autopay-functionality-for-mutual-fund-sip-investments/article35677906.ece

UPI-based AutoPay functionality for mutual fund SIP investments

Literature Review -

Fund houses such as Aditya Birla Sun Life Asset Management Co. Ltd, Baroda Pioneer Asset Management
Co. Ltd and DFC Asset Management Co. Ltd and distributors such as Funds India allow you to invest in
mutual funds using unified payments interface (UPI). So, along with payment options such as net banking
and national electronic funds transfer (NEFT), you can use UPI as well.

To use UPI, you need to have a bank account with a UPI-enabled member bank and a registered mobile
number linked to your bank account. You need to have a virtual ID that looks similar to your email ID—
name@bankname.

In case of Funds India, download the app on your smartphone. Create the ID on the app itself, choose the
fund and make payments. If you already have a UPI and don’t want to create a new ID, after you choose the
fund, you can make the payment through your bank app or BHIM app. In case of fund houses, you can pay

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 on their website. Here, the fund house will send you a notification on your mobile phone. In your bank or
BHIM app, you will receive the collect request which you will have to approve using your password.

Transaction duration

When you buy mutual funds using net banking or NEFT, the money at times gets processed the next day. As
transaction through UPI is instant, there is a possibility that the process will take place faster when you
invest. You also don’t need to key in your bank details such as your customer ID, password and one-time-
password for your transactions. After enabling UPI, you can use the virtual ID and password. Currently, only
select distributors and fund houses provide this facility. You can use this service for lump sum investment.
The standing instruction option is currently not available in UPI.

The functionality will allow customers to set up their mutual fund SIPs in a few steps.

With UPI Auto pay, customers can set up their SIPs in three steps – selecting the fund, input of monthly SIP
investment amount, and authentication with a UPI PIN.

Analysis-

Traditionally, investing in Mutual Funds was a complicated affair and it required a lot of manual submission
of documents and financial data. Due to advancement in Banking, NEFT was introduced but it still took
more than a day to process. Further, after introduction of UPI, investing in mutual funds has now become
fairly simple and the transaction time has reduced drastically and is now almost instant. The Auto pay
feature and Auto debit feature helps to make individuals more disciplined as it helps automatically investing
at regular intervals helping individuals maintain investing habits with the least effort.

Article 3: Indian Mutual Funds Making Their Mark Domestically with

E-Commerce

Author:- Sumant L. Wachasundar

Co-author:- Dr. Reeta V. Sontaka

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As per data analysed, the share of mutual funds has increased in the last three years to 14% of the
financial savings/ assets in India even as the share of banks –which have traditionally got the bulk of
financial investments –has fallen to 65%, as of March 2018, from 71% in March 2016.

Chart 1:-Share of mutual funds vs banks and insurance in financial investments of

IndiaMore importantly, mutual funds’ clout in the capital markets –both equity and debt –has
increased. Indeed, mutual funds have emerged as the stabilising agent in the market against global
risks, especially hot flows of foreign portfolio investors (FPIs).As per data analysed on money flowing
into the capital markets as part of portfolio investment strategy (excludes long-term strategic
investments), mutual funds’ share of equity markets has increased from just about 8.5% as of March
2014 to

18.4% as of March 2018, while that of FPIs has fallen from 61.8% to 56.4% of the market
capitalisation during the same period.
Adoption of digital payments has paid rich dividends, which can be seen in the rapid influx of digital
money into the industry. The share of gross inflows through digital modes has grown from just about
0.5% two years back to more than 6% in March 2018.
As of June 2018, gross inflows through digital modes had jumped to nearly 10%.

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Chart 2 &3:-Digital payments’ share of overall inflows has surged
Among the factors driving this is growing availability of information, awareness and penetration
of the industry across geography/investor segments. Given the pace of development of the
digital space, it is expected that even the laggards would catch up in the years to come. The
government, too, has played a significant role in digitisation through extensive efforts at financial
inclusion —spreading financial awareness to the remotest parts of the country and bridging the
geographical divide.

The government and the regulators have also taken several initiatives to boost the fintech
ecosystem and provide startups with new opportunities to launch competitive products. The
introduction of payments banks and small finance banks has improved financial inclusion. Clearly,
the role of technology can only get bigger from here. Hence, the digital mode is the way forward for the
industry, intermediaries and investors. Adoption will be a win-win for all –it will help boost the

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 industry’s penetration, provide it an effective medium to improve efficiency and reduce costs, and
pass on these benefits to investors, drawing them in.

Current and new technology that would impact the mutual fund ecosphere

Online platforms for investors

These are online platforms created by AMCs, RTAs, industry associations such as AMFI (MF
Utility) and distributors and stock exchanges that allow investors to transact online in mutual
funds.
Big data analytics

Data is king, and big data analytics allows mutual funds to analyse statistically the actions of investors,
and helps them glean better insights on the investors.
E-commerce platforms

If allowed, investors would be able to buy mutual fund products through such ecommerce
platforms, thus enhancing the reach of the product across the country.

Robo advisory

As per the CFA Fintech Investment Survey of 2016, the asset management industry would be the most
impacted by financial automated advice tools. Robo advisory firms do just that by creating
automated programmes that dispense financial planning advice to investors.

Social media

The asset management industry, too, has accepted social media holistically to create awareness
of its products and services, as well as to service clients and capture investor needs.
CONCLUSION:-

Innovation in technologies have brought new paradigms in the global business. The financial services
sector has confronted with dramatic technological advancement and as a result, this sector has grown
remarkably. Researchers in the European Union, China, and other advanced countries have found that a
well-functioning payment system brings a better financial system and boosts consumer confidence. On
the other hand, inefficient payment system delays the efficient transfer of funds and settlement
among individuals and economic mediators. The study in India is limited on the efficiency of the
payment system driven by technology on the financial system and economy. This study intends to bridge
the gap. The present focuses on measuring and analyzing the impact of digital payments on mutual
funds. The use of digital payments is increasing in mutual fund industry compared with its

21
 counterparts like bank investments and insurance as shown in above data. Therefore, it is concluded
that Digital payments helps to surge overall investment in mutual fund.

Analysis:

• Digitisation has played a significant role in social inclusion for all sections of the society.

• Digital payments leads to increased efficiency and reduce costs, these benefits are later passed
on to the investors.
• There has been a major shift for investors to move from traditional modes of transactions to
digital payments.

Article 4:UPI clocks 1.3 billion transactions in December

Livemint

Published on 4th January 2020

The transactions were worth ₹2.02 trillion in December compared to ₹1.89 trillion a month ago.
Currently, 143 banks are live on UPI. UPI allows users to transfer money any time, on a real-time
basis, across multiple bank accounts, without revealing details of one’s bank account to the other
party. The simple, hassle-free three-year old payment system is popular among the masses. Besides,
the government has been introducing steps to popularise digital payments via UPI. For instance,
businesses with more than ₹50 crore sales will have to compulsorily offer electronic payment modes
such as debit cards powered by RuPay and low cost digital payments options such as UPI from 1
January 2020. Penalty for defaults will kick in from 1 February, the finance ministry said earlier this
week. “Department of Revenue (DoR) will notify RuPay and UPI as the prescribed mode of payment
for undertaking digital transactions without any MDR. Accordingly, all companies with a turnover of
₹50 crore or more shall be mandated by DoR to provide the facility of payment through RuPay Debit
card and UPI QR code to their customers," the finance ministry had said.

National Payments Corporation of India had reported that 39% of the transactions made through UPI
are done through Yes Bank.

Month No. of Banks live on UPI Volume (in Mn) Amount (Rs. in Cr.)

Feb-20 146 1325.69 2,22,516.95

Jan-20 144 1305.02 2,16,242.97

Dec-19 143 1308.40 2,02,520.76

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 Nov-19 143 1218.77 1,89,229.09

Oct-19 141 1,148.36 1,91,359.94

Sept-19 141 955.02 1,61,456.56

Aug-19 141 918.35 1,54,504.89

July-19 143 822.29 1,46,386.64

June-19 142 754.54 1,46,566.35

May-19 143 733.54 1,52,449.29

Apr-19 144 781.79 1,42,034.39

Mar-19 142 799.54 1,33,460.72

Feb-19 139 674.19 1,06,737.12

Jan-19 134 672.75 1,09,932.43

Dec-18 129 620.17 1,02,594.82

Nov-18 128 524.94 82,232.21

Oct-18 128 482.36 74,978.27

Sep-18 122 405.87 59,835.36

Aug-18 114 312.02 54,212.26

July-18 114 273.75 51,843.14

June-18 110 246.37 40,834.03

UPI Product Statistics from npci.org from June 2018 till February 2020

The above table shows growth of UPI from June 2018 till February 2020. There has been a rapid
increase in the use of Unified payments along with increasing volume of transactions and more banks
are providing their clients the necessary infrastructure for supporting the digital payments. Since June
2018, the volume of transactions has grown by 438%.

Analysis:
1. We can see that the number of transactions via real-time payments system Unified Payments
2. Interface (UPI) continued to rise, clocking 1.3 billion transactions in December, National
Payments Corporation of India (NPCI) data showed.
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 3. These transactions were 7% higher than in October, and 111% higher on a year-on-year basis,
the data showed.
4. This is due to the wide acceptance and adoption of UPI payment systems at all levels.
Everyone, right from the consumers at the base level, to the manufacturers, retailers and
merchants have adopted UPI payments.
5. This is due to the various benefits of UPI like its low cost, which makes it very affordable, and
since its an instant payment system, it saves a lot of time.

Article 5:UPI Transactions Drop in March, RTGS Shoots up due to Coronavirus

Lockdown
News 18

Published on April 21, 2020

Unified Payments Interface (UPI) is an instant payment system developed by the National Payments
Corporation of India (NPCI), an RBI regulated entity.

UPI is built over the IMPS infrastructure and allows one to instantly transfer money to any bank
account According to the data, the volume of UPI transactions in March slipped to 124.68 crore from
132.57 crore in February.

The value of UPI transactions too came down to Rs 2.06 lakh crore during March, from Rs 2.23 lakh
crore in February. The number and value of transactions through the UPI had been constantly
growing, barring marginal decline in some months.

The 21-lockdown imposed by the government with effect from March 25 to fight coronavirus seems to
have adversely impacted the transactions through UPI. The real impact, however, will be known once
the transactions data for April is known.

The NPCI data on IMPS (Immediate Payment Service) revealed the number of transactions fell to
21.68 crore in March from 24.78 crore in the previous month. There was also a decline in the value of
transactions during March to Rs 2.01 lakh crore from
2.14 lakh crore in February.

IMPS provides real-time fund transfer which offers an instant, 24X7, interbank electronic fund transfer
service that could be accessed on multiple channels like Mobile, Internet, ATM, SMS, Branch and
USSD.

The 24X7 IMPS empowers customers to transfer money instantly through banks and RBI authorised
Prepaid Payment Instrument Issuers (PPI) across India through mobile phone, internet banking and ATM.

24
Meanwhile, an RBI data revealed that value of Real Time Gross Settlement (RTGS) transactions shot up
to Rs 120.47 lakh crore in March, up 34 per cent over February. The total value of RTGS transactions in
February was 89.9 lakh crore.
Analysis:

• After constantly rising for the past several months, the volume, as well as value, of transactions
through UPI payment system dropped in March due to the 21-day nationwide lockdown imposed to
combat the coronavirus infection.

Article 6:UPI to see growth in the ‘phygital’ space in a post-covid world: NPCI

LiveMint

Published on 20th May 2020

Retail payments organisation National Payments Corporation of India (NPCI) on

Thursday said that the relevance of Unified Payments Interface (UPI) will grow in the ‘phygital’
world, combining the physical and digital space, in a post-covid world, with increasing relaxations
being witnessed in India’s lockdown.
“As merchants and users avoid crowding in shops and neighbourhood stores, merchants will start
taking and managing orders digitally, while requesting for payments online remotely. The UPI-used
case will only grow further in this combination of the physical and digital world," said Praveena Rai,
chief operating officer, NPCI, at a webinar.

Rai added that several digital payment fintechs are now starting to equip merchants with online
payment services, where neighbourhood store owners can send an SMS, which carries a UPI-
payment link and guides users to the UPI payment app installed on their phone, when clicked.

“While QR codes were enabled for merchants, customers weren’t heading to stores and making
payments through these QRs. So, we saw a need for these merchants to operate in a ‘phygital’ form
and also got requests for this technology stack," said Rai, while addressing media queries. During the
lockdown, several fintech players have leveraged this model, where merchants can send UPI payment
links to customers who are locked inside their homes, due to the lockdown. For instance, Bengaluru-
25
based payment gateway recently said that it is providing its existing products ‘payment pages’ and
‘payment links’, as a simple tool for neighbourhood kirana stores to send payment links to customers
as they deliver essential goods in the locality.Several other digital fintechs have also adopted a
‘phygital’ approach, during this covid-19 induced lockdown.Flipkartowned PhonePe as well as
Google Pay allowed users to identify neighbourhood stores in a customer’s locality, digitally, which
were open and delivering, while allowing users to pay then through their respective apps. On whether
UPI can see a strong use case for processing salary payments, Rai said that NPCI had received such
requests and already allows corporates to make bulk payments through UPI.

“There are corporates which are processing bulk payments through UPI and this solution is provided
to them through banks," Rai added. NPCI also said that UPI is seeing used cases across grocery-
related payments, supermarket deliveries in localities, as well as online recharges. Another trend,
which the organisation highlighted was around bulk payments made for consolidated orders by a
certain apartment.

For April, UPI transactions in the country fell below the 1 billion mark, as the digital payments
industry continued to suffer from the lockdown.

According to data released by NPCI total UPI transactions in the country stood at 990 million in
April, as against 1.25 billion in March. This was almost a 21% month-onmonth decline, and April
counted as the second consecutive month after March, when UPI payments in the country took a dip.

Analysis:

• The QR code arrangement has smoothened operations; ordering food and making payment are very
easy now.
• People are now habituated to using UPI, which has drastically increased due to the mass adoption of
a unique digital innovation, the QR codes.
• Most of the merchants and small shops have also started accepting digital UPI payments through the
QR code, as it is a low cost and instant payment method.
• This makes UPI acceptance quite simple, and it helps both the customers as well as the retailers, as
they do not have the headache of managing cash due to digital acceptance of payments.

26
Research Paper:
In the present study, an attempt is made to find the acceptance and use of UPI. The study is based on the
secondary data collected from the researches published on the digital platforms.

Kanchan Kathial (2018): analysed that Digital transactions showed a sudden growth on the next
month of demonetization. Low availability of cash moves the country towards cashless transactions.
The move of demonetization forced people to use electronic Internet banking, mobile banking,
credit and debit cards, mobile wallets and other prepaid payment instruments (PPIs) to buy goods and
services and do other financial transactions.

Raghunandan G, Ms.Harshita GK , Ms. Jyothi A (2018) studied that, the real accomplishment of
demonetization has been that it has helped the government in curbing black money flow into the
economy. Unethical practices such as terrorism funding, gambling have come to a standstill. The cost of
assets like land and gold has deflated to a large extent. Barsharani (2018): Suggested that Mutual funds
have already changed the investment scenario of international as well as Indian financial markets
as mutual funds are those investment tools in which a large number of investors, having a
common goal, can invest together. Mutual fund is a company which combines the investment funds of
many investors whose investment goals are similar, and in return invests those funds in a variety of
securities carrying maximum profit and minimum risk.

Rajeswari M. Raja (2018): concluded that in the modern world the trend of financial market plays very
crucial role in the development of nation’s economy. Common public is also interested to get higher
rate of dividends for their investments in various money markets out.

Somanjoli Mohapatra (2017) In their study reported that the single interface across all
NPCI systems besides creating interoperability and superior customer experience. The UPI seeks to
make money transfers easy, quick and hassle free. The proliferation of smart phones, the
availability of an online verifiable identity, universal access to banking and the introduction of
biometric sensors in phones will proactively encourage electronic payment systems for ushering in
a less-cash society in India.

27
 Radhika Basavaraj Kakade, Prof. Nupur A. Veshne (2017) In their study reported that the UPI has
made digital transaction for individuals as easy as sending text messages. Service is available 24X7,
not like RTGS or NEFT which don’t work on holidays or during non-banking hours. This will bring
enormous efficiency in the system and help India become a truly cashless economy.

Roshna Thomas, Dr. Abhijeet Chatterjee (2017) The study reported that UPI is a tool with
compatible features that can make monetary transactions easy and affordable to the customers
though it is difficult to sideline the challenges. A strong Aadhar platform (UID) combined with
statistics for the country pertaining to increased financial inclusion, Smartphone adoption and
telecom subscription indicate positive prospects for UPI whereas competition from mobile wallets
and possible cases of failure from banks to overcome technical errors especially relating to the
front-end platform designed by them may negatively impact the scope of this innovative payment
tool.

Analysis:

• Demonetization gave digital payments the necessary push to inculcate it’s use in our daily lives.
• It has helped the government to curb the black money circulation in the economy.

28
 PRIMARY DATA
DATA ANALYSIS AND INTERPRETATION OF QUESTIONNAIRE

QUESTION 1: Age Group

Analysis:

Most of the respondents who were surveyed are in the age group of 21-30 years (36%), followed by
respondents in the age group of 18-20 years (26%), then 31-40 (20%) , followed by 41-50 (11%) and Above
50 (7%).

29
Question 2: Gender

Analysis:

100 people were asked to fill the questionnaire, out of which majority were males (59.2%) and about
(40.8%) were males. There isn’t a vast difference in the gender of the respondents.

30
Question 3: Occupation
The following pie charts gives a visual representation of the occupation of all the individuals
surveyed for the research project:

31
Analysis: From the above table and graph, it can be inferred that:
• 25% of all the individuals are self-employed, involved in business activities
• 31% of all individuals surveyed are salaried or employees or companies.
• 4% of the individuals surveyed are retired and do not earn any income.
• 13% of the individuals surveyed are homemakers, who do not earn any income.
• 27% of the individuals surveyed are students, who do not earn any income.

Question 3: Do you use UPI to make payments?

Analysis: From the above table and graph, it can be inferred that:
• A vast majority of people, i.e., 79% use UPI to make payments.
• While a small minority of people, i.e., 21% people do not use UPI to make payments.

32
Question 4: Which of these UPI Apps do you use?

The chart below gives a visual representation of the app preferences of various people surveyed:

33
Analysis:

• More than half of the people surveyed(55%) people prefer to use GooglePay to make their UPI
payments
• Followed by GooglePay, is Paytm- with 45% people using it to make their UPI payments
• Apart from that, PhonePe(34%), AmazonPay(26%), MobiKwik(17%) are used by people to make
their payments.

Question 5: Since how long have you been using UPI?

Analysis:

34
 • We can see that a good number of people have adopted UPI payments and have started using it to
make payments in the last one year. (65%)
• Out of that, 21 percent have started using UPI in the last 6 months, and 44% people have been using
it for more than 6 months.
• 44% people of the total surveyed have been early adapters, and are using UPI since more than a year.

Question 6: How did you get to know about UPI?

Analysis:

35
 • There are 44% people who got to know about UPI because of their friends and relatives. This
majorly is because of the referral policy of various UPI apps.
• 26% of the total surveyed have been informed about UPI services by the bank staff.
• Advertisement has helped 26% people to get to know about and start using UPI.

Question 7: How often do you use UPI to make payments?

Analsysis:

• UPI has been an integral part of the daily lives of 48% people. These people use UPI very often to
make payments.
• UPI is used less often by 35% of the people.
36
 • Lastly, there are 13% people who rarely use UPI and only 4% people never use UPI.

Question 8: Are UPI and digital payments are being widely accepted at all merchant stores now?

Analysis:

Among the total people surveyed, 76% people feel that UPI and digital payments are being widely accepted
at all merchant stores now. While, 24% people feel that UPI and digital payments are not widely accepted at
merchant stores.
37
Question 9: Do you carry more cash, or prefer to have balance to use UPI for payments?

Analysis:

• We can see that more than half of the people(54%) still prefer to carry more cash for payments than
usng UPI.
• While 46% of the people now prefer to have more UPI balance to make payments.
38
Question 10: Which digital Payment method do you find easiest to use?

aa

Analysis:
• 45% of the people feel that GooglePay is the easiest app to use.
• Nearly 23% people feel that MobiKwik is the easiest to use.
39
 • Followed by that are, PhonePe and AmazonPay with 19% and 13% people voting for them
respectively.

Question 11: Which of the following things have you used upi payments for?

Analysis: The above graph aims to understand the various purposes people use UPI for:
• We can see that half of the people (50%) use UPI payments to make their bill payments.
• Apart from that, 46% people use UPI to make merchant payments.
• Lastly, 43% people use UPI payments to make P2P transfers and nearly 40% people use UPI to do
Recharge.
40
Question 12: What problems do you face while using UPI?

41
Analysis:

• We can see that 48% people face network problems while using UPI.
• 39% of the total people have authentication problems while using UPI.
• Lastly, around 36% and 28% people face Safety and Security and Pending for Verification error
respectively while using UPI.

Question 13: On a scale of 1 to 5 (1= low, 5= high/same level of acceptance as cash), how much are UPI
payment methods accepted by merchants?

42
Analysis:

• We can see that, according to a vast majority of people, i.e., 74% people, UPI is readily accepted by
the merchants in the same way as cash.
• While 22% of the people have a neutral opinion about it.
• Only a minority percent of the total surveyed people(4%) feel that UPI is not readily accepted by
merchants.

SECONDARY DATA

CHAPTER:1

Introduction

From the barter systems of exchanging goods to using currency, mankind has progressed a lot. We are
currently in a digital era where everything is at our fingertips, the internet has made our lives easier than ever
before, from ordering food online to paying bills with just a click, digital payments have played a crucial
role.

We all are used to payment apps like Phonepe, Google Pay, Paytm, etc these apps have become a crucial
part of our lives. The transaction on these apps takes place by UPI- The Unified Payment Interface is a
single-interface payment system, developed by the National Payment Corporation of India (NPCI). UPI:
Unified Payment Interface is a smartphone application that allows users to transfer money between bank
account. It is a platform where customers can link bank accounts held by different banks into a single UPI
application and use their registered cell phone number to easily trade between them around the clock. The
UPI Platform is a UPI system that operates from multiple banks accounts in a single mobile application from
participating banks, combining multiple banking features such as seamless fund routing and merchant

43
payments under one roof. The National Payments Corporation of India (NPCI) developed a single-window
mobile payment system (Mobile Payments). There is no need to enter bank details and other sensitive
information every time a customer initiates a transaction. UPI has introduced new features such as In-App
payments, cross-screen QR codes, the addition of web-based payments, and the extension of the range of
services to online payments using UnionPay-powered e-wallets.

Thousands of companies across hundreds of categories have recognized the essential benefits that UPI
Autopay offers and have switched on with it in the last year and a half.

Even though it has a huge impact on the digital economy, UPI payment risk comes with considerable
security risks.

Let us take a step back to understand the rise and development of this ground-breaking payment method in
India and where it is heading. UPI’s invention has redefined recurring payments and made them beyond our
imagination.

RISE OF UPI

UPI was first launched in 2016 it was piloted by the National Payments Corporation of India (NPCI) and
launched by 21 member banks from Raghuram G. Rajan, then RBI governor. UPI’s target audience involves
everybody that use digital methods of transferring money. We look at the rise of UPI transactions in India
and how they have become a critical factor in the country’s evolving cashless ecosystem. With the UPI
payment limit being Rs. 1 lakh, according to the reports, over 3 billion transactions took place in 2018 on
UPI platforms, with 620 million transactions touching the Rs 1 lakh crore mark alone in December 2018.
According to another report in January this year, the number of UPI transactions seen as pioneering in the
digital payment system and a crucial factor in a cashless economy was around 1.09 trillion rupees.

The value of online financial transactions in India increased 10.5 percent between December 2019 and
December 2020, the company said. A joint report by market research firm WorldPay states that 39.7% of
India’s e-commerce payments in 2020 were made through digital wallets, with wallets becoming the
country’s leading online payment method. According to data from EY, digital transactions based on UPI
increased 110% in volume and 109% in value between June 2020 and June 2021 if current trends continue
over the next few years, UPI’s contribution to the nation’s entire digital payments industry will increase

44
significantly. The consistent rate of growth reflected in UPI payments could mean up to 18 percent of the
country’s total target of 30 billion transactions is achieved in the coming years.

By 2023, 60 billion UPI platform transactions are projected to account for more than 50 percent of India’s
digital payments. Looking at the number of years, we can confirm that the total number of UPI transactions
reached 800 million in March 2019. UPI transactions are growing faster this year than in the same period last
year. Between April and August 2021, there were 14.79 billion transactions, 22 times the 6.68 billion
recorded in the same period in 2018. UPI It took three years to reach a billion transactions a month and the
next billion in years to come.

UPI has witnessed exponential growth in the past year, taking a large share of the market from players such
as PhonePe, Paytm, and Google Pay. In FY20, 125.1 billion rupees (12,519 million) were made in
transactions worth 2 lakh 1,317.0 crores (2,131 trillion rupees), representing a 13.2% increase in volume and
a 14.3% increase in value compared to FY19. UPI in March, the value of Rs5 lakh crore, the highest ever,
surpassed Rs2.3 billion in transactions at the end of the 2021 fiscal year. From January 2020 to September
2020, from the Reserve Bank of India (RBI), the value of UPI transactions rose by INR 2,162 billion to INR
3,290 billion over the same period. The surge in UPI transactions Has increased consumer interest in paying
bills, charging cell phones, and buying non-essential goods on e-commerce platforms. UPI Payments‘
impact on the Indian market is enormous and has made a difference in payment methods and shopping sites
used by consumers.

Unified Payment Interface (UPI) usage across India in June 2021, by platform.

In June 2021, out of the 2.8 billion transactions, Walmart subsidiary PhonePe had a share of 46 percent and
GooglePay a share of 35 percent. It was the seventh month in a row that PhonePe topped the list after it had
passed GooglePay in December 2020 for the first time. The third big player is Paytm with a share of nearly
12 percent.

The above graph depicts the rise In UPI transactions month after month we can see that there is a huge rise
in UPI transactions the pandemic has also played a vital role in rising of UPI transactions.

UPI Remitter Banks – Top 50 Banks (September’21)

(September-2021)

45
 UPI Total BD % TD% Total Debit Debit Success %
Remitter Volume Reversal Reversal
Banks (In Mn) Count (In Mn)
Approve
d%
State 1,036.45 89.52% 7.00% 14.87 96.04%
Bank Of 3.48%
India
HDFC 327.32 94.77% 5.16% 0.07% 1.70 98.43%
Bank Ltd

Bank Of 231.73 92.28% 7.53% 0.19% 1.38 98.46%

Baroda
ICICI 225.22 94.29% 5.16% 0.55% 2.06 43.31%
Bank
Axis 2 95.19% 4.14% 0.67% 1.50 60.12%
Bank Ltd 14.22

The above table depicts data of UPI transactions by various banks it shows the contribution of some of the
largest banks of India in UPI transactions, one of the columns also indicates the % approval rate of UPI
transactions

*Volume of transaction in million

Source: UPI Ecosystem Statistics | NPCI – National Payments Corporation of India

UPI indeed has great future potential; it has made our lives easier and is indeed one of the safest and fastest
modes of payments

Government has plans of use of UPI for easier transactions across countries at the same time a powerful risk
management system in case of frauds. UPI symbolises the progressive vision of a country marching towards
a digital economy. The pandemic has also played a vital role in boosting the digital economy of India. The
UPI transactions are growing at a dynamic rate and have good growth potential. And can contribute
significantly to India’s GDP.

46
Is UPI secure?

UPI transactions use highly secure encryption format that is not easy to tamper. NPCI’s IMPS network
handles about Rs.8,000 crore worth transactions every day. This is expected to exponentially increase with
UPI technology. It uses a two-factor authentication method, similar to OTP, for verifying every transaction.
However, UPI PIN will be used in the place of OTP for validation.

Banks that support UPI

The major banks that support UPI services are:

1. State Bank of India (SBI Pay)

2. ICICI Bank (iMobile)

3. HDFC Bank (HDFC Bank MobileBanking)

4. Axis Bank (Axis Pay)

5. Bank of Maharashtra (MahaUPI)

6. United Bank of India (United UPI)

7. Vijaya Bank (Vijaya UPI)

8. Union Bank of India (Union Bank UPI)

9. Federal Bank (Lotza)

10. UCO Bank (UCO-UPI)

11. Yes Bank (Yes Pay)

12. Karnataka Bank (KBL Smartz)

13. Punjab National Bank (PNB UPI)

14. Bank of Baroda (Baroda MPay)

15. South Indian Bank (SIB M-Pay)

What apps allow UPI usage?

47
There are many apps coming up every day that supports UPI payments, such as Google Pay, PhonePe,
FreeCharge, Mobikwik, and others. You need to verify your bank account information to generate UPI ID on
the app before you begin transactions.

CHAPTER 2:

THE INTERFACE AND PROCESS OF USING UPI

Step 1: Download and install a UPI app

48
Pick any of the apps when you search for UPI apps in app stores. I recommend PhonePe app, Axis Pay
UPI app, or Pockets by ICICI.

This article will guide you with PhonePe app, but other apps will have mostly similar steps for
registration and transaction.

Step 2: Launch app and register yourself

49
First verify your number. UPI system populates your bank account details and authenticates using phone
number linked with your bank account. So, install on phone with the number linked to your bank account
only. After number is verified, provide some basic details like Name and Email, and set a 4 digit password
(Pin). If you ever forget your Pin, which you need for logging into the UPI app every time you use it, you’ll
need access to your email to recover it.

Step 3: Add a virtual password address aka UPI Username

Just like your email, your UPI virtual password address (VPA) is your UPI ID which others will use to send
you money. It’s of the form myupi@ybl or yurupi@icici (no .com needed). You can create up to 3 VPAs on
PhonePe app and cannot delete them later yet, so be careful with your selection.

Swipe left to right to bring up the menu and press your number to go to your profile. Find “Add VPA”
option and add a VPA. Pick something easy to remember and spell out. Doesn’t have to be your name. For
example, I could create one as myupi@ybl
50
VPA is not case sensitive so MyUPI@ybl is same as myupi@ybl

Step 4: Add a bank account

It’s easy. Swipe left to right. Go to Bank Accounts menu and press Add Bank Account button. Then select
your bank. Your bank account linked with your phone number will be added without you needing to enter
anything such as account number. You can add more than one account if you have multiple bank accounts
linked to the same number.

51
It will also show you if an MPIN exists for that bank account. If not, you can create one by going to your
banking app or website (some apps allow you to generate that without leaving the UPI app. You may need t

enter your Debit Card details). If you have forgotten your bank MPIN, you can reset it from within the app:

52
Your first transaction

Step 1: Go to app home and click Send

Step 2: Go to VPAs and click Add VPA Contact

If you don’t have any one whose VPA you know, you can try sending Re 1 testupi@sbi – a working VPA
we have created for testing purpose. You can also download other UPI apps like Pockets by ICICI and Axis
Pay, create new VPAs, and send yourself money from other apps.

After you enter a VPA, you have to click verify button and it will verify if VPA is valid and also show
registered name of the recipient (not shown in picture below for privacy reasons).

53
Step 3: Enter amount you’d like to send

When it asks you if you’d like to send money now, accept ‘Yes’ and move to the ‘send’ screen. Type the
amount you want to send and from which linked bank account. As you can see from the screen you can even
choose to send Re 1.

You will be taken to a screen by NPCI (National Payments Corporation of India) within the UPI app,
where you will need to enter MPIN of the bank account linked to that VPA.
54
And done!

All this takes less than a minute.

Receiving money is even easier (it always is!). Remember that the money will come to the bank
account that is associated as the default account with your VPA (that you provide someone for
receiving the money).

Lots of UPI apps will let you pay bills and split bills with friends too. Some apps also have a QR code
scan where you can send or accept money just by showing someone your QR code or scanning their
QR code without having to enter VPAs.

55
 CHAPTER 3:

SIGNIFICANE OF UPI

A brainchild of the National Payments Corporation (NPCI), the UPI is poised to revolutionise the way
payments are done seamlessly, without any hassles. Launched with an aim of moving steadily towards a
less-cash and digital society, it has been built on an IMPS platform.

Unified Payments Interface (UPI) has been introduced as a system that can power multiple bank accounts (of
participating banks) as well as several banking services and features like fund transfer (P2P) and merchant
payments. All this will be done in a single stroke through a mobile application.

Benefits Of UPI

In fact, within a day of going live, the UPI app successfully surpassed the 10,000 mark in terms of
downloads. The industry is abuzz as the UPI is looked upon as a key innovation in the banking sector. It is
expected that it will help resolve multiple banking problems faced by the common man on a daily basis.

The instant authentication & verification of identity and transfer of money indeed make the entire process
seamless. But the question of the hour is what about the section of society that is yet to receive access to
Internet.

It is a sad but true fact, that there are still many parts of the country that thirst for a steady supply of
electricity and water, the Internet is a far cry for them. Such people have to rely on ATM branches and
kiosks for withdrawing and depositing their money.

With demonetisation occurring on November 8, 2016, ATM service providers are going the extra mile to re-
calibrate the cassettes in ATMs, for the insertion of the new currency notes and making cash available to this
section of rural and semi- urban population.

56
With UPI being adopted by 29 banks, it will be a game changer in the coming days while coexisting with
ATMs. The single platform mobile app has some key features which gives it a differential edge in the clutter
of mobile wallets, mobile banking, and net banking.

How UPI Looks To Transform The Banking Sector

A brainchild of the National Payments Corporation (NPCI), the UPI is poised to revolutionise the way
payments are done seamlessly, without any hassles. Launched with an aim of moving steadily towards a
less-cash and digital society, it has been built on an IMPS platform.

Unified Payments Interface (UPI) has been introduced as a system that can power multiple bank accounts (of
participating banks) as well as several banking services and features like fund transfer (P2P) and merchant
payments. All this will be done in a single stroke through a mobile application.

In fact, within a day of going live, the UPI app successfully surpassed the 10,000 mark in terms of
downloads. The industry is abuzz as the UPI is looked upon as a key innovation in the banking sector. It is
expected that it will help resolve multiple banking problems faced by the common man on a daily basis.

The instant authentication & verification of identity and transfer of money indeed make the entire process
seamless. But the question of the hour is what about the section of society that is yet to receive access to
Internet.

It is a sad but true fact, that there are still many parts of the country that thirst for a steady supply of
electricity and water, the Internet is a far cry for them. Such people have to rely on ATM branches and
kiosks for withdrawing and depositing their money.

With demonetisation occurring on November 8, 2016, ATM service providers are going the extra mile to re-
calibrate the cassettes in ATMs, for the insertion of the new currency notes and making cash available to this
section of rural and semi- urban population.

57
With UPI being adopted by 29 banks, it will be a game changer in the coming days while coexisting with
ATMs. The single platform mobile app has some key features which gives it a differential edge in the clutter
of mobile wallets, mobile banking, and net banking.

Smooth Transaction

While net banking and mobile banking requires the customer to undergo multiple preliminary steps ranging
from registration of payee or beneficiary, generation of OTP etc. The same goes for mobile/digital wallets as
well wherein the money has to be ultimately transferred through bank accounts using a long and tedious
processes. UPI has a remarkable edge over net banking as it eliminates the hassle of third party payments.

With UPI, real-time transfer of money happens between bank accounts using smartphones. Instead of
installing multiple apps for different banks, UPI brings it all under one umbrella.

All it takes is a unique ID which will hold all the information in an encrypted manner along with a PIN. This
ensures that the customer doesn’t have to feed in details for each transaction, and makes the process secure
and safer as well.

Convergence

The ease of access provided by UPI deems it quite an interoperable service. With just a virtual payment
address and a click, the payment is done. The ability to transfer money between accounts without switching
multiple profiles further adds to its advantages. At the end of the day, UPI allows the customers an access
and freedom to transfer their money as and when they like, with or without the smartphone, acting as one
key device for all purposes.

Low Cost, High Volume

UPI is undoubtedly a positive step towards creating a new ecosystem in the banking sector especially with
the boost to low-cost, high-volume retail payments. Another notable point is that it isn’t just the customer
that benefits from UPI but also the banks.

58
Anyone with a basic smartphone can access the service which in turn helps reduce cost for the banks as they
can reduce the number of PoS machines installations, thus reducing the overall merchant acquisition cost.

Today, India stands second in terms of number of smartphone users in the world, therefore UPI will be
available for a larger number of people. Moreover, it brings together all the main stakeholders including
merchants, banks, and consumer on a common platform.

In Conclusion, UPI is a payment platform with a disruptive technology coming from the Indian Saddles
which would enable and empower retail digital payments. It is a fantastic value proposition as it includes
simple authentication process, simple issuance & acquiring infrastructure, national interoperability and real-
time money transfer, which makes the transaction experience user- friendly and hassle free. Most of the
high-frequency small transactions are still in cash. Hence the ease and convenience UPI offers will help
individuals prefer to pay their day- to- day expenses like bill payments, fund transfer etc. digitally.

It will be interesting to see how going forward UPI will smoothen the path for less-cash economy, what with
banks and several digital wallets having joined the bandwagon already. UPI is a clear step towards breaking
the silos that exist in the BFSI industry by removing the multiple multi-authentication processes with a one-
click process.

While banks were initially sceptical of payment wallets, this UPI will definitely have an upper hand over the
existing digital wallets and streamlines the whole process. On the other side, the ATM sector will further
strengthen along with the existence of UPI as it will bring on more users into the digital age while retaining
their ATM accounts.

Moreover, this will also help in the rise and adoption of Aadhaar ATMs, card less ATMs, with disruptive
new age technologies, wherein the ATMs will dispense cash without inserting ATM cards.

CHAPTER 4:
59
 BENEFITS AND LIMITATIONS OF UPI

• Benefits of UPI:

UPI has made a huge impact on the payment ecosystem. Because of the UPI, everyone, big or small, is
making cashless payments. You, me and crores of people are now using the Paytm, Phonepe, Google Pay,
SBI Pay and so on. All these mobile payment apps use the UPI payment system for the payment. In this post,
I would tell you that what makes UPI better than NEFT and IMPS.

Have a look on the following infographics which summarizes the benefits of UPI. Further, you should go
into the details.

1. Free Fund Transfer

There were days when you have to part 5% of the amount for the fund transfer. Visa and Mastercard still
charge 1-2% of the amount for making payment to the merchant. NEFT and IMPS are not costly but it
would certainly pinch if the transaction is small.

But The UPI is Cheapest. The costs are so low that Banks have made it free. Most of the banks and payment
apps do not charge a paisa.

However, let me tell you that cost is involved in this payment method. But, the banks, NPCI and mobile app
companies are bearing this cost just to promote the UPI fund transfer. Thus, in the future, there can be some
charges. Nevertheless, it is certain that the UPI Fund transfer charge would be cheapest.

2. Useful For Small Transaction

Before the UPI, you may have not paid ₹10 or 20 by using the debit or credit card. The card transactions are
costly and small shopkeepers avoided it. But, UPI has changed the scenario. Now every shopkeeper or street
vendor is ready to accept UPI payments.

The smooth and low-cost transaction had made it feasible for small shopkeeper and consumer as well. Once,
you start using the UPI, you need fewer visits to the ATM. The UPI has made the merchant transaction very
easy.

3. Privacy of Bank Account

60
You would agree that the convenience of the online transaction comes with the probability of fraud. That is
why we are wary to share our account details and card details with anyone. The UPI has addressed this
problem. It had found out the way of the fund transfer without the disclosure of bank account number or card
details. In the IMPS and NEFT, you have to share bank account detail to get the money.

In the UPI System, UPI ID or VPA is used in place of the bank account number or card number. But in this
method, you do not require to share the account number for getting the money.

You have to only give the virtual payment address or UPI ID. The virtual payment address is similar to our
email ID. E. g Ramesh45@icicibank, 9876543210@axis. It is easy to remember this UPI ID.

In fact, many mobile apps find out the UPI ID by using the contact details. Hence, you even don’t need to
know the UPI ID or VPA of the beneficiary.

4. More Secure

Not everyone uses the card for payment. Not everyone uses the net banking for the online payment. People
are reluctant to use the cashless methods because of the security concern.

What if someone overlooks your PIN while you punch it at the POS terminal. What if the website steals your
credit card data and uses it for the international transaction?

The UPI has minimized this concern. Actually, it is more secure than the present mode of transaction. In the
transaction through the UPI, you never share your bank account details. You do not enter your credit card
number or CVV. You only give a virtual payment address which does not give any clue about your bank
account.

Also, the authentication takes place at your smartphone. It is done by punching the UPI PIN. You can easily
make it discrete while typing at your smartphone.

5. Instant Transfer

The UPI is based on IMPS platform. Thus, It works 24 x7. You can make the payment any time. There is no
restriction on holidays or odd hours. The bank strike will also not affect the UPI payments. In fact, it is so
fast that you would not be able to stop payment.

The UPI not only make instant fund transfer but registration is also instant. In the NEFT and IMPS methods
of fund transfer, you can’t transfer money just after the registration. There must be a cooling period. It varies
from 30 minutes to 24 hours. But, UPI does not need registration for making a payment. Enter the
beneficiary details and make payment. No hassle.

6. One App, Many Accounts

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It is a novel thing. Initially I could not digest the fact that all of my bank accounts can be accessed at one
place. The UPI has made it possible. You can link all of your bank account at one UPI App. Thus, you do
not need different apps of different bank account. One UPI app, which may not be from your bank, can be
used to make payment from your bank accounts.

However, you have to choose a default bank account. So that if anyone makes payment to your UPI ID, the
money goes to the default account number.

7. Various Apps to Choose From

You also get the liberty to choose any UPI based app from the google play store. It is not mandatory to use
the App promoted by your bank. Your bank account may be with the ICICI Bank, but you can use the UPI
app of the axis bank.

Before using an app, check carefully the interface and ease. There are many Non- Bank UPI Apps which are
quite popular. Some apps also give rewards for making transaction. The popular apps are Google Pay,
Phonepe, Paytm, SBI Pay, Mobikwik etc.

8. Request Money

If you have given a service or product to someone and want the payment, what would be way to ask for the
money? You will send a person or make a call.

You would agree that getting money from a party is always tough. There can be numerous excuses. But, the
UPI would give more power in the hands of biller and It would not be easy for the client to give excuses.

The ‘Request Money‘ facility of the UPI sends a message directly to the party. This message is sent via the
bank. It only asks approval for the payment. If the client approves, the money would be remitted instantly. If
the client does not approve, it means he/she does not want to pay. Now the biller can deal it differently.

Beware, some fraudster may send you the unsolicited request of the payment. So approve only those
payment which are genuine. Punch the UPI PIN only after the full assurance.

9. No Loss of Interest

In a mobile wallet, you deposit money upfront to pay for the recharge, bill payment, shopping etc. So when
you put your money in the mobile wallet it does not earn any interest. If you deposit ₹10000 in a mobile
wallet for a month, you would lose ₹33 of the interest. You would have earned this amount in the bank
account.

In the UPI, you do not lose this interest as your money does not leave the bank account. The amount gets
debited from the account at the time of the actual transaction. The wallet does not come in the middle. The
money goes from one account to another.

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 10. Rewards and Cashbacks

There are many UPI based mobile apps. All of them are competing to capture the maximum number of
customers. Thus, to lure the customer many UPI apps are giving rewards and cash back for making
transactions. The Google Pay, SBI Pay, Amazon Pay, Paytm and Phonepe are the big names which give
rewards for using the UPI payments.

You may have learned that some people are making transaction just to earn the cashback.

Limitations of UPI:

• Internet Connectivity:

Transactions or shopping cannot be held without internet facility. Therefore, the internet can become a
constraint in facilitating e-commerce activity. However, payments can be done without using the internet,
but then too, for buying a product online you need to have internet connectivity.

• Security and threats:

Before doing any online transaction make sure the gateway is highly secured. Beware of hacking, phishing
emails which unknowingly can take your necessary details and make use of it. Although the transactions
made are frequently initiated by the banks, but on a failure side, it can cost you high on your mental peace. It
takes at least 3-7 business days for any revert of payment.

• Costly:

While companies and merchants are giving their customers so much of discounts on the purchase of goods
through digital cash, there are several hidden costs like maintaining servers, data storage cost, the
requirement of machines which are actually loading heavy cash burden on them knowingly.

• Confidential data management:

It is important to know that who will be held responsible for managing the data. Every time we do
transaction our personal details and card details are being shared with the third party. What if the data gets
leaked? Or it gets misused by the third party itself.

Increase in Digital Payments in Mutual Funds:

Digital payments are now commanding a significant share in mutual fund transactions. A recent AMFI –
CRISIL study shows that over the last two years, transactions in mutual funds through digital payments such

63
as debit card, mobile banking, IMPS and mobile wallets have grown from 0.5% to nearly 10% as of June
2018.

The report attributes this growth to growing availability of information, awareness and increased penetration
of mutual funds across investors. The encouragement by government and regulator to fintech start-ups,
launch of small finance banks and payment banks, running of financial inclusion campaigns to spread
financial awareness in the remote parts of the country have also played a key role in digitisation, says the
report.

While transactions through mature transaction platforms such as debit cards grew at 15% annually newer
payment platforms such as mobile wallets are fast gaining consumer acceptance. This is reflected in the
exponential increase clocked by these platforms (mobile wallet and mobile banking 120% and IMPS 106%)
in the last one year. Despite these numbers, in term of volumes card payments cruise ahead of the remaining
platforms, reports the AMFI –CRISIL study.

64
 CHAPTER 5:

HISTORY OF UPI

In April 2009 with the objective to integrate all the payment mechanisms available in the country and make
them uniform for retail payments, the National Payment Corporation of India was formed. By March 2011,
RBI found out that in India only six non-cash transactions happen every year per individual citizen while 1
crore (10 million) retailers accept card-based payment. Around 14.5 crore (145 million) families have no
access to any form of banking. There is also the problem to tackle black money and corruption that happens
mostly in cash.

RBI in 2012 released a vision statement for a period of four years that indicated commitment towards
building a safe, efficient, accessible, inclusive, interoperable and authorized payment and settlement system
in India. It is part of the Green Initiative to decrease the usage of paper in domestic payments market. UPI
was officially launched in 2016 for public use.

Under RBI guidance, NPCI became the primary body with the task to develop a new payment system that is
simple, secure, and interoperable. UPI works on four pillar push-pull interoperable model where there will
be remitter/beneficiary front end PSP (payment service provider) and remitter/beneficiary back-end bank
that settles the monetary transaction for the users. As per CEO of Netmagic Solutions, UPI became one of
the most successful deep-tech innovation coming out of India.

In December 2019, noting the success of UPI, Google suggested to the US Federal Reserve Board the
development of FedNow, a real-time payment system for United States.

With exponential growth of UPI, India became the world's largest real-time payment market with 2,550
crore (25.5 billion) annual transactions in 2020 as per data from ACI Worldwide and Global Data leaving
behind China and United States.

As part of financial inclusion initiative, NPCI with fintech start-up Ubona Technologies in 2021 started
working on developing a voice-based payment service for feature phone users in low connectivity zones
over UPI payment ecosystem under Interactive Voice Response project. The system will use Dual Tone
Multi-Frequency (DTMF) signalling technology with two-factor authentication (2FA) flow for peer-to-peer
(P2P) transaction. From September 2020 to June 2021, it is under beta testing and awaiting RBI approval for
large scale deployment.[17] The beta testing and pilot experiment was completed by October 2021 and RBI
started formulating guidelines for nationwide use.

65
As per the Economist Intelligence Unit Report 2021, UPI made India a leader in global real-time payment
market followed by China and South Korea. After the decision of Ministry of Finance to nullify merchant
discount rate (MDR) in 2019 on UPI, the number of low value transactions skyrocketed making huge gains
on real-time transaction volume data. Many nations such as Brazil, Bahrain, Saudi Arabia, Singapore, United
States and European Union are now trying to emulate the success of UPI in their own market.

From January 1, 2019, UPI became a popular payment option for Initial Public Offerings (IPOs). The
transaction limit was enhanced from ₹1,00,000 to ₹2,00,000 in March 2020. From December 2021, RBI
again increased the limit to ₹5,00,000 for Retail Direct Scheme and IPO applications. To make UPI
economically feasible for payment companies, RBI is considering merchant discount rate (MDR) on future
UPI transactions.

66
 CHAPTER 6:
Future and Growth of UPI

Cash is king, but Digital is divine. India has built an expansive, secure, efficient and scalable public digital
infrastructure, ‘India Stack’ which is paving the way for a massive world-leading ‘Digital Payments
Revolution’.

The entry of well-funded and aggressive technology-first companies (erstwhile dominated by Banks) has
made digital payments ubiquitous in India and laid a strong foundation for digitization and cross-selling of
other financial services and products.

New Use cases of UPI, Offline Retail Payments, Contactless Digitization of Transit. Given its ease of
transaction, mass popularity and acceptance, UPI could drive growth of financial services such as micro-
insurance, retail investments, online education, kirana tech, agri tech and even cross-border supply chain
services.

UPI transactions would continue to grow at a fast pace driven by new UPI uses such as recurring UPI
payment to Ola, Netflix and new UPI apps.

Credit on UPI like credit cards, could be a game-changer for lending. The government is planning to give
GST rebate to merchants and customers based on UPI transactions. It will soon be mandatory for businesses
to collect customer’s GST/PAN number while initiating UPI transactions.

Lack of internet connectivity or low speed of internet, especially in remote areas, is a major impediment in
adoption of digital payments. The first cohort of the Regulatory Sandbox is testing offline retail payments.
We can expect to see card- and wallet-based solutions similar to UPI and mobile payment transactions using
USSD codes that are possible even without internet or smartphones.

With RBI increasing the limit of contactless payment to Rs 5,000, we expect contactless payments to grow
substantially. Effective implementation of this technology has the potential to give a substantial boost to
small value digital transactions, with innovative solutions such as mobile and wearable devices.

The most effective mass market use case of contactless payments is the digitization of transit systems such
as the metro rail system of London, Bucharest, Tokyo and Moscow. In India, Delhi and Mumbai metros
could lead the way for mass adoption of contactless digitization of transit.

Mass digitization of small businesses

There are around 13 million traditional grocery stores (Kiranas) in the country each of which are doing 100-
200 transactions a day on an average i.e., low-ticket items of everyday purchases.

67
Not just grocery or commerce stores, but also services like plumbers, salons, etc are expected to be digitized.
The transformation of just 10 per cent of the 13 million Kiranas could boost retail consumption by more than
5 per cent and generate approximately 3.2 million new jobs in India, according to a new report from
Accenture and the Trust for Retailers and Retail Associates of India (TRRAIN). FinTech players are
targeting the small traders and the Tier 2 and Tier 3 cities with digital payment services and credit schemes.
The increased transparency in bookkeeping and effective tracking of receivables and payables will facilitate
credit assessments and eventually lead to access to credit for MSMEs.

Open Banking/Account Aggregator framework to drive lending to MSMEs

For India to become a $5 trillion economy, lending needs to be done at a mass scale so both businesses and
individuals can grow. As NITI Aayog CEO Amitabh Kant pointed out, India’s credit-to-GDP ratio (about 51
per cent) is lowest among its global peers and we need to increase private debt.MSMEs, with 63 million
units, constitutes about 90 per cent of all enterprises in India, employs over 120 million people and
contributes significantly to the GDP.

As much as 85 per cent of MSMEs are unregistered. More than 70 per cent of these MSMEs are micro-
enterprises, in active need of microfinance.

There is a large financing gap within MSMEs as well as individuals, where the credit penetration in India is
below 15 per cent. Less than 20 per cent of MSMEs have access to formal credit amid an estimated MSME
debt demand of Rs 70 trillion.Most of the MSMEs being in the informal sector, barely possess any recorded
financial history, which affects their capability to borrow credit from organised lending sources and have to
resort to informal sources for debt such as family, friends, local moneylenders and chit funds. They end up
paying higher rates on loans borrowed with high collateral.

Open Banking with Open Credit Enablement Network (OCEN) and Account Aggregator framework along
with the proposed Public Credit Registry (PCR) which would be a repository of all credit related
information, would help plug the information gaps and give a fillip to lending to MSMEs.

Super Apps

Super-apps could be a major disruption in digital payments. A super app is a platform developed by a
company offering various services under one umbrella. Apart from allowing users to make digital payment,
super apps provide other services such as ticket booking, games, online shopping, banking and consumer
finance.

Customer behaviour varies from person to person; while some prefer super-apps, others will prefer multiple
apps.

68
For e.g. China’s WeChat, which started out as a messaging app, expanded into payments, cabs, shopping,
food ordering, and cab services to become a super app.

It has almost two million third-party mini-applications within its app.

Prominent super apps in India are SBI YONO, MyJio, PayTm, etc. The Tata Group is also planning to
launch a super app. While some payment super apps have come up in India, we expect them to expand their
offerings further. Tech savvy banks are expected to create their own super apps as there is data, brand
recognition and value to be built rather than just being enablers of digital transactions and the interoperable
standards of UPI payments makes it a valuable proposition.

Mass adoption of Buy Now Pay Later (BNPL)

There are only 30-40 million active credit cards in India, which is just 3 per cent of the population. BNPL, a
contextual credit solution, has a huge potential in consumer credit in India, due to its ease of transaction.

The ease of signing up for an EMI/Pay Later solution, along with a quick and simple KYC to check
eligibility in a matter of minutes, has made the BNPL solution popular.

While ability of BNPL to assess customers will improve with Account Aggregators, BNPL is likely to
expand the credit culture in a similar but limited way as UPI has expanded digital payments.

It is estimated that almost 20 per cent of all the digital transactions in India were converted into ‘pay later’
schemes last year.

BNPL companies tie up with both merchants and e-commerce companies to serve as a payment option. For
merchants, this is a great way to drive up the value of transactions. Most of the BNPL providers are available
on the checkout of online shopping platforms.

Globally, BNPL giants such as Afterpay (Australia), Affirm and Klarna have been very successful. Most of
the volume here comes from customers who don’t have a credit card i.e., they were expanding the consumer
credit market, not cannibalizing it.

Internationalization of Aadhar, UPI and RuPay

India is a pioneer of UPI. NPCI is attempting to take its products — UPI and RuPay card — global and
assist other countries in establishing a ‘real time payment system’ or a ‘domestic card scheme’ through its
subsidiary NPCI International Payments Limited (NIPL).

To increase RuPay’s acceptance around the world, NPCI has tied up with 30 other payment networks and
has thus made its presence felt across 195 countries across the globe.

69
Modular Open-Source Identity Platform (MOSIP) is India’s open-source offering that crystallises the
learning from Aadhar and offers it to the world. It is currently being implemented in the Philippines and
Morocco with 8 more countries in various stages of their national identity projects.

ID4D, a digital identification project from the World Bank, is inspired by Aadhar.

Public Credit Registry (PCR)

RBI is in the final stages of identifying entities that will set up the PCR. By bridging the information gap, a
PCR will ensure credit flow to the last-mile customers, that have been left out of the formal financial fold.

PCR is an information repository where all information about existing as well as new corporate as well as
retail borrowers is stored. The idea is to capture all relevant information in a single large database on both
the outstanding loans and repayment history of an entity/corporate/individual.

AtmaNirbhar App Store

There are plans for creating an AtmaNirbhar App Store, in order to break the duopoly of Google Play Store
(96 per cent share) and Apple App Store. Various Indian apps have been up in arms against Google, which
has set a timeline of April 2022 for the enforcement of the autocratic 30 per cent commission on in-app
purchases of digital goods from its Play Store.

The government’s existing Mobile Seva App Store is expected to be refurbished to create the Indian App
Store. The government may ask Google and Apple to pre-install Indian App Store in all phones sold in India
in the near future.

India may also attempt to distribute its App Store on Progressive Web App (PWA) and get users to access it
via any browser.

Digital Currency

RBI is exploring a legally safe, secure form of Central Bank Digital Currency (CBDC) with utmost
precaution to come out with a digital currency in India. Prior to the launch of such a currency, the RBI will
ensure that the necessary technological capability is created.

RBI has flagged some major concerns to the government on crypto currencies. The government will come
out with a decision on the same. Potential of Blockchain to unlock efficiency in cross-border digital
payments. Blockchain technology was initially used to support the digital currency Bitcoin, but is now being
explored for a wide variety of applications. Blockchain is a public distributed ledger with encryption and
traceability, which can be managed in a decentralized fashion.

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For instance, SWIFT global payment transfers currently take 24 to 48 hours, with SWIFT message approval
itself taking at least 24 hours. This can be minimized with a blockchain-based digital transfer in which the
entire global payment transfer can be completed within minutes

71
 Conclusion

• UPI is a great step towards making the cashless payments faster, smoother and easier. It is said that
the launch of UPI will prove to be a milestone in the transformation of modern India.
• UPI is all set to become an efficient alternative to mobile wallets. The future of UPI is bright, and as
we can see; UPI has already become the preferred mode of payment for a vast majority of people in a
very short span of time.
• UPI acts as a storehouse and lets you access all your bank accounts using a single app. This makes
the entire process convenient. Due to this, the total transactions per month of UPI have been
increasing ever since it has been launched.
• Apart from that, we can see that more and more people have started using UPI due to their cash back
and referral offers which has been another great force which has added to the user base of UPI.
• Going forward, I feel that UPI will be the preferred mode of payment of almost all the people due to
its various advantages like ease of use, real time payments, low cost and high transaction success
rate. UPI seems to be one of the top technological innovations of the decade.
• UPI has greatly impacted the banking industry and have disrupted the market with its unbelievable
features. Earlier, the transaction time used to be a few days, which has now come down to a few
seconds because of UPI. Investment has also become very smooth due to UPI as the need for
paperwork to add funds has been eliminated. You can add funds immediately using your UPI ID.
• UPI has greatly helped the merchants, manufacturers and retailers as accepting payments has become
a very easy process due to the innovation and introduction of QR Codes.
• UPI has also helped the government as the payments are now transparent and made through banks,
instead of cash. This has been of great help to the government as it has become easy to track the
usage and spending of people.

Summing it up, we can see that UPI has brought in a big behavioural change in the way we spend, invest and
save our money and on our preferences of choosing UPI and digital payments over the use of cash and
hence, we can say that UPI is the future of payments.

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 Findings

1. After analysing the responses given by the respondents, it was observed that the customer satisfaction has
improved greatly due to UPI, which proves Ha; the alternate hypothesis as true.

2. Due to the increased spending of money using UPI and an increase in frequency of UPI payments by
individuals, we can see that there is a variance between customer perception towards UPI and traditional
services, holding Ha; the alternate hypothesis as true.

3. From the survey conclusions and interpretations, we can see that UPI and digital payments are more used
among the younger generation and only a small percent of the older generation uses UPI to make pavements.
Thus, holding Ha; the alternate hypothesis as true.

4. There is no evident data to prove that the cyber scams have increased after the introduction of UPI, and
we have also studied about the safety and security of UPI. Therefore, Ho, our null hypothesis is True.

•We have also understood how UPI has greatly impacted our daily lives and how there has been a big
increase in the amount of money we spend using digital payments.

• We have understood how UPI is saving the transaction time and is a low-cost method, therefore proving to
be an efficient payment gateway for all of us.

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 SUGGESTIONS

1. The investors should also be questioned about their satisfaction regarding UPI payments.

2. Interviews can be conducted in order to gain insight about personal beliefs of individuals.

3. Knowledge about the individual’s perception of the future of UPI should also be taken into consideration
in further research papers.

4. It is important to create awareness among individuals who are not currently using UPI, in order to expand
the UPI and digital payments as a whole.

5. This research paper mainly considered consumers and self-employed businessmen, not big companies.
Further research can be conducted on the behaviour and preferences of companies, how they have adopted
the usage of UPI and the impact of UPI on their payment methods.

74
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 Appendix

Age Group *
18-20
21-30
31-40
41-50
Above 50

Gender *
Male
Female

Occupation *
Student
Salaried-Person
Self-employed
Homemaker
Retired

Do you use UPI to make payments? *

Yes
No

Which of these UPI Apps do you use? *

GooglePay
PhonePe
Paytm
Amazon
MobiKwik

Since how long have you been using UPI? *

0-6 months
6-12 months
More than 12 months

How did you get to know about UPI? *

Bank Staff
Friends or Relatives
Advertisement
Others

How often do you use UPI to make payments? *

Very often
Less often
Rarely
Never

Are UPI and digital payments are being widely accepted at all merchant stores now? *
Yes

76
No

Do you carry more cash, or prefer to have balance to use UPI for payments? *
More Cash
More UPI Balance

Which digital Payment method do you find easiest to use? *

Google Pay
MobiKwik
PhonePe
AmazonPay

Which of the following things have you used upi payments for? *
Merchant Purchase
Bill Payment
P2P Transfers
Recharge

What problems do you face while using UPI? *

Safety and Security
Authentication
Network Problems
Pending for Verification

On a scale of 1 to 5 (1= low, 5= high/same level of acceptance as cash), how much are UPI
payment methods accepted by merchants? *
1
2
3
4
5

77
78