The document discusses the Unified Payments Interface (UPI), an instant real-time payment system developed by NPCI that allows money transfer between bank accounts. UPI combines multiple bank accounts into a single mobile application for easy fund transfers. It provides secure transactions without sharing private information. UPI usage in India has grown rapidly, surpassing $100 billion in transactions in October 2021. However, challenges remain in maintaining infrastructure costs and expanding financial inclusion in India.

1. CIA 3
TOPIC:
UNIFIED
PAYMENT
INTERFACE
• DONE BY:
• MANAV BATRA 21211444
• MOHAMMAD HAIDER 21211445
• ABHAY INDOLIA 21211401
• DHRUV MALHOTRA 21211430

2. Definition
• A system called the Unified Payments Interface (UPI) combines several
bank accounts. It makes easy fund routing, and merchant payments into a
single mobile application (of any participating bank). Additionally, it
supports “Peer to Peer” collect requests that may be planned and paid for
according to need and convenience. It is an immediate real-time payment
system that enables customers to transfer money between different bank
accounts in real-time without disclosing personal information to the other
party. The National Payments Corporation of India (NPCI), which is
governed by the Reserve Bank of India (RBI) and IBA (Indian Bank
Association), established the concept of UPI.

4. UPI’s key characteristics:
Faster than NEFT
immediate fund
transmission.
UPI is accessible
around-the-clock.
Additionally, it is
accessible on vacations.
Each bank offers a
unique UPI for several
mobile operating
systems, including
Android and iOS.
It can be used to pay
utility bills and for
payments to merchants.
Any complaint may be
submitted simply through
a mobile app.
UPI services won’t be
subject to any fees from
the Indian government.
According to the finance
ministry, UPI would
continue to be free.

5. Problems solved by upi
By using the collect
payment option, make
Person to Business (P2B)
interactions easier. This
would improve commerce
and the Indian economy as
a whole.
UPI will reduce the amount
of cash used in the
economy, which is now
12% of GDP.
The annual cost of cash
transfers will decrease
thanks to UPI (currently
around Rs. 20000 crores)

6. Number of Unified Payments Interface
transactions across India from financial
year 2019 to 2021, with estimates until
2026 (in billions)
Unified Payment
Interface (UPI) usage
across India in FY 2022,
by platform

7. Achievements
of Unified
Payments
Interface
(UPI):
During the epidemic year 2020–2021, digital transactions using UPI had
amazing development, and numerous nations have expressed interest in
learning from India’s experience in order to duplicate the concept.
According to figures from the NPCI, the UPI’s transaction value surpassed
USD100 billion in a single month for the first time in October 2021, further
solidifying its status as India’s most widely used digital payment system.
By 2025, the Indian digital payments market is expected to have grown from its
current value of Rs. 2,153 trillion (27% CAGR) to Rs. 7,092 trillion.
Strong use cases for merchant payments, government initiatives like the Jan
Dhan Yojana and the personal data protection bill, as well as the expansion of
MSMEs, the millennial generation, and high smartphone penetration are all
expected to contribute to the growth.
Recently, for instant, low-cost, cross-border fund transfers, the central banks of
India and Singapore will connect their respective Unified Payments Interface
(UPI) and PayNow fast digital payment system. In July 2022, the connectivity
become operational.

8. Benefits
of Unified
Payments
Interface
(UPI):
Customers merely share a virtual address and give no other critical
information, therefore it is secure. Your bank account is used as an alias for the
“virtual payment address.”
When a specific merchant’s account is hacked, your security cannot be
compromised because their database will only include a list of virtual
addresses.
Compared to other payment methods that send sensitive information like credit
card numbers, it provides superior security. All of these information is
concealed when utilizing UPI because just a Virtual Payment Address (VPA) is
utilized.
With digitalization, the market’s black money can be diminished, increasing
compliance and increasing tax revenue.
The UPI has significantly impacted both the fintech sector and banks. It helps
banks cut costs associated with merchant onboarding and offers them a low-
cost alternative to cash.

9. Challenges
of the
Unified
Payments
Interface
(UPI) :
Some experts worry that UPI won’t be able to maintain itself
over the long term without levying MDR to pay for its
infrastructure. Right now, neither the customer nor the
merchant pay an additional fee.
Even though cash transactions have become less common
since the introduction of UPI, they are still important. Due to
the tax terrorism threat and cash’s greater acceptance as a
payment method, people still favor using it.
It is still very difficult to conduct UPI transactions because
there is still a significant percentage of the population without
access to the internet or smartphones.
Since most people lack digital literacy, they are unable to use
the UPI system. Furthermore, UPI apps’ lower adoption is
caused by their predominant use of English.

11. Conclusion
• Through the UPI, the NPCI has built a strong payment
infrastructure that allows for cashless and hassle-free
transactions. With the numerous payment applications and easy
procedures to register and begin transactions, it is quite
straightforward to learn and utilize.

12. References
• India: number of UPI transactions 2026 | Statista
• India: UPI usage by platform 2022 | Statista
• https://www.geeksforgeeks.org/unified-payments-interface-upi-
and-its-challenges/