Will UPI Bring Financial Inclusion in India?
In today’s time, we live in a digital age where we have access to everything while staying in our comfort zone. With just a few taps on our smartphones, we can get each and every service, from purchasing groceries to making payments. The new-age payment method has completely changed the way in which the economy functions. One such innovation is the Unified Payments Interface (UPI). Many of you must have heard about UPI payment but do not know what it is or how it is transforming the payment system.
Simply put forward, UPI is a type of payment method that enables users to send money across banks instantly and that too 24*7 hours. UPI payment system that is based on the JAM (Jan Dhan, Aadhaar, and Mobile) trinity was launched in August 2016 by the National Payment Corporation of India (NPCI). It is an instant and real-time payment system that allows interbank Peer-to-Peer (P2P) and Person-to-Merchant (P2M) payments via UPI QR code.
With a UPI, you can link multiple bank accounts into a single account without merging several banking features. UPI payment has transformed the payment method and is undoubtedly placing India on the track towards a cashless economy.
Brief History of Financial Inclusion in India
While UPI has undoubtedly changed the payment system in India, empowering people at the grassroots level was not easy. For a very long period, the economy had run on some physical barter or money system. As the payment system evolved in India, urban and middle-class people kept up with the transition pace, but vast rural and low-income people struggled with financial inclusion. Urban Indian population conveniently adopted the new-age technological advancements in communication, banking, finance and medicines, in comparison to rural counterparts who struggled for necessities and had no digital identity to open an account.
The introduction of JAM, the program by the Government of India, offered the solution for all these problems, and there was evident financial inclusion in India for digital payments.
Streamline Digital Payments With UPI
The primary intent regarding the introduction was an instant real-time payments system to solve the interoperability problem and offers ease of transaction to the users. The impact of UPI payment is so powerful that it has spawned a whole ecosystem by creating numerous opportunities for start-ups and entrepreneurs. Some of the reasons that have made UPI a hero of digital payment in today’s time include:
- Instant, 24*7 hours money transfer via a smart device
- A single app to access various accounts
- Single-click two-factor authentication method with the regulatory framework
- Data privacy
- Merchant payment with one app
How Does UPI Works?
While there are numerous other payment apps, they follow standards of authentication and authorization for the payment to be processed. But there is no common language to standardize authentication and authorization that allows for a seamless transaction.
UPIs use their APIs to connect disparate systems and help solve the authentication and authorization challenges that users face to offer interoperability among existing entities in the Indian financial system.
Undoubtedly the digital payment landscape has transformed in today’s era. Emerging FinTechs will play a crucial role in the growth of digital transactions by offering transparency, security, swiftness, and cost-effective mechanism. Bajaj Finserv is one of the best apps that offers reliable UPI payment services guarded with NPCI guidelines. With Bajaj Pay UPI, you can make instant bill payments with just a few clicks on your smartphone, and that too in the comfort of your home by scanning the UPI QR code. Also, you can enjoy various cashback offers that can help you save extra.
So, what are you all waiting for? Download the Bajaj Finserv app, and enjoy an instant and seamless payment experience.