Do you remember the time when you had to stand in long queues at banks?
You issued cheques, and it would take three to four days to clear them locally. If it was an outstation cheque, payments took 15 days to a month to reach the recipient. Do you also remember how bank holidays would halt all work and businesses? People would say, “Banks are closed; you’ll have to wait.”
Do you remember paying hefty charges to get a demand draft (DD) made? The bank would issue a banker’s cheque or DD, which also took time. It’s not as though these things don’t exist today, but what we have now has revolutionized the entire process.
UPI- The Platform that Changed it All
UPI is a digital payment system that has revolutionized the way money is transferred. Whether it is buying coconut water from a roadside vendor or making large business payments, UPI has made transactions seamless and instant. With over ₹20 trillion worth of transactions happening every month, its impact is undeniable.
The Indian Government’s fintech policies and NPCI (National Payments Corporation of India), have played an important role in bringing all banks under one umbrella.
It has made payments so simple that if you have a mobile phone and a bank account, you can transact thousands or lakhs of rupees with just a few taps. How long does it take? A blink of an eye!
You press the “Pay” button, enter your password, and the payment is instantly received on the other end—be it at 2 a.m., 12 p.m., or during national holidays like Republic Day, Independence Day, Diwali, or Holi, when banks are traditionally closed. UPI has made banking available 24/7.
The speed it has brought to banking is incredible. You no longer need to carry cash in your pocket. UPI has reduced cash transactions and has saved the government significant costs associated with printing currency. Of course, cash hasn’t completely disappeared. There are still remote areas where cash is commonly used. However, with smartphone penetration now at around 70-80 crore users (out of India’s 140-145 crore population), UPI usage is on the rise.
Smartphones make UPI more accessible, though they can also work with analogue phones. However, with smartphones, people find it more comfortable. This is the story of a generation that no longer wants physical notes.
You’ve probably seen shopkeepers with QR codes displayed prominently. Instead of asking for change, they’ll say, “Please PayTM or Mobikwik this amount.”
India’s GDP, which was growing at 7-8% at one point, owes a portion of that growth to UPI. Why? Because when transactions speed up, there’s no delay in payments or supply chains. Faster payments mean faster supply and consumption cycles.
When UPI was introduced, people were initially hesitant. They thought it was complicated. They wondered about setup processes. But now, UPI has outpaced even online banking.
It has reduced the need for debit cards and credit cards significantly. Small transactions, once dominated by credit cards, are now handled via UPI. The QR codes and UPI IDs allow instant transactions, making it a powerful tool.
