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Unified Payment Interface

1. The Unified Payment Interface (UPI) crossed 100 million users, which made it the fastest adopted payment system option in the world.

2. Recently the Singapore and UAE enabled the UPI payment acceptance in their countries and NPCI aims to take the UPI global.  

What is UPI?

1. It enables users to send and receive money to the accounts with mobile platforms without entering bank details by using an email as a virtual payment address or by scanning a QR code.

2. The open architecture of UPI enables any bank account to be accessed through a UPI app.

3. It has also enabled the rise of payment apps such as Paytm, Google Pay, Phone Pe in the market.

4. These payment apps have been enrolling the small merchants including hawkers to accept payment through the UPI.

Features of the UPI

1. The UPI has also waved merchant fees up to Rs.200.

2. It also allows multiple bank accounts into a single mobile application.

3. It is very safe and as the transaction cost is so low that banks have made it free.

4. Privacy of bank accounts and instant transfer 24X7.

5. There is no loss of interest and users are rewarded with cashback.

Who launched the UPI?

1. UPI was launched in 2016 by the National Payments Corporation of India (NPCI), an umbrella organization for retail payments and settlement systems in India.

2. NPCI is controlled by the RBI and the Indian Bank Association (IBA).

Which are the challenges?

1. Acceptance of merchants and traders.

2. Amending UPI protocols to include currency conversion support.

3. Directly connecting UPI to global payment systems accompanied by amendments in Indian regulators.

4. NPCI has to rely on banks and aggregators in those countries.

How is India’s digital economy performing?

1. It is expected to cross USD 1.5 trillion by 2025 and USD 1 trillion by 2022.

2. The mobile data usage is expected to increase by 5 times by 2023.

3. China’s Alipay and WeChat are accepted in 30 countries, but these are closed and loop payments, while the UPI can work with any bank accounts.

4. NPCI also aims to capture the NRI remittance as currently, India is the largest remittance receiver in the World.

5. Digital India program aims to make India ‘Faceless, Paperless and Cashless’, which impacts the digital economy.

Where the impacts of Digital India seen?

1. Pubic Sector Services: Creating awareness and access points to Common Service Centres in rural India under the Digital Saksharta Abhiyan. Digital transformation across areas like e-governance, online citizen services.

2. Growing digital usage will affect the media and entertainment sector more.

3. Fintech sector has seen an uptick in the past few years and Indian start-ups in the digital sector have made their presence felt globally with their success.

4. IT services market set to reach USD 13.2 billion by the end of 2019 in India and E-Commerce marker to grow 3 times to over USD 100 billion by 2022.

5. India will have 2nd largest graduate talent pipeline by 2020 globally which will further boost Digital India.

6. Digital platforms have impacted the education sector in the method of learning and making education accessible.

6. Travel and Hospitality sector: This sector has seen rapid growth. The contribution by the travel and tourism sector to GDP is expected to increase more than double from 2017 to 2028.

Digital India Programme

1. It aims to turn villages into self-sustained units.

2. Over 12,000 rural post office branches linked digitally and 1.15 lakh gram panchayats were connected under the Bharat Net program.

3. Digi Gaon or Digital Village is conceptualized as a connected village where citizens avail various e-services.

5. Digital villages are equipped with solar lighting facilities, LED assembly units, sanitary napkin production units, Wi-Fi choupal.

5. Digital lockers enable the sharing and storing of documents electronically.

6. Urban-Rural divide: As of 2017, 64% of Urban India was connected to the internet while only 20% was connected in rural India.

7. Pradhan Mantri Gramin Digital Saksharta Abhiyan aims to make citizens digitally literate. It aims to reach 40% of rural households by covering one member from every household by March 2019.

8. Digital India Programme generated employment and entrepreneurship in India while also contributing to the environment by reducing fuel consumption, waste management, greener workplaces, etc.

Source: RSTV