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Unified Payments Interface (UPI)
Why is it in the news?
- The recent analysis by RBI and the National Payments Corporation of India (NPCI) and some industry players, from April 2018 to March 2019 shows that UPI platform outperforming e-wallets in terms of the value of transactions done.
- The UPI is also eating away at e-wallets’ market share in specific areas such as person-to-merchant (P2M) transactions.
More in the news
Findings:
- Payments made on the UPI platform saw a remarkable growth of over 400% in the April to March period.
- UPI is completely interoperable and as such, it is unique in the world, where you have an interoperable system on the ‘send’ and ‘receive’ side.
- That is, you can send money from different accounts in different banks and receive it in different accounts in different banks.
- UPI Vs e-wallet:(1) The rapid growth of UPI is accompanied by a reasonably strong growth in the value of transactions done using e-wallets.(2) However, the e-wallet's growth has not taken off much following the fillip it received in the aftermath of demonetisation in November 2016.(3) E-wallets accounted for 6.3% of all customer payments made to merchants in 2017-18 and UPI accounted for just 1.6%.(4) In 2018-19, the share of e-wallet transactions fell to 1.87% and the share of UPI rose to 17%.
- However, others argued that the size of the digital payments market in India was such that various instruments could exist without really eating into each other’s market share.
- Debit Vs Credit card:(1) Debit cards are far more popular than credit cards as can be seen from the fact that the value of debit card transactions stood at ₹3.05 lakh crore in February 2019.
Source
The Hindu.