Karunakara Devadiga, a milk vendor in Mangaluru, accepts money for the milk he supplies to the customers on his mobile phone. D Deepak recharges his prepaid mobile number by using this payment tool. Recently, when Manju N of Mangaluru was urgently in need of money he got a loan of ₹3,000 from his friend on his mobile phone.
Thanks to mobile phone apps based on the Unified Payment Interface (UPI) of the National Payments Corporation of India (NPCI), customers can undertake digital transactions without much hassles. Small-value transactions have helped UPI register cumulatively around ₹1.16 lakh crore worth of transaction in the 20 months of its operation.
Though launched in August 2016, the platform gained momentum during the just completed fiscal. Of the ₹1.16 lakh crore, around ₹1.09 lakh crore of transactions happened in 2017-18. UPI handled ₹24,172 crore — highest ever since August 2016 — in March 2018 alone.
Mahabaleshwara MS, Managing Director and CEO of Karantaka Bank, told BusinessLine that around 15 per cent of the total digital transactions in his bank is being done on the UPI platform. His bank records daily transactions numbering around 1.5 lakh on the UPI platform. Many other banks also have their own UPI apps.
NPCI came out with its own mobile app on the UPI platform — Bharat Interface for Money (BHIM) — in December 2016. Since then, around ₹31,823 crore has been transacted on BHIM. Of this, transactions amounting to ₹30,018 crore happened in 2017-18.
Like BHIM, many private players, including PhonePe and Google’s Tez, have also come out with a separate app for UPI-based payments.
Users feel that the launch of UPI platform has helped many people to smartphone-based digital mode from cash, for small-value transactions.
Deepak said that the UPI is more user-friendly. Unlike Net banking and debit/credit cards where one has to use alpha-numeric passwords and refer to card grid numbers, the user here can send the money either to the mobile number of the virtual payment address (VPA) with a two-factor authentication. A person can even pay amounts as small as ₹1 on this platform.
The limit for money transactions in the UPI platform is another advantage for users. Mahabaleshwara said users can transact up to ₹1 lakh on his bank’s UPI platform.
However, BHIM’s website says that a user can send up to ₹20,000 per transactions and a maximum of ₹40,000 per day for one bank account.
In spite of such large transactions in the last 20 months, many are still not aware of this payment option.
Mahabaleshwara said that initial hand-holding for the new user either at the merchant, bank or service provider’s level will lead to better adoption of this payment tool.
He observed that better mobile internet connectivity and more awareness about the QR code scanning option in the UPI platform will improve UPI adoption among users even further.
Private players — be it in recharging mobile phones or booking a ticket for a movie — were the first to tap the potential of this platform.
In recent months, some government agencies such as LPG marketing companies and electricity supply companies have also been providing UPI as one of the payment options.