The 16th-century economy experienced the most remarkable changes perhaps in the field of Global banking and finance. Through letters of exchange drawn on the various bourses that were growing throughout Europe, bankers were able to mobilize capital in fabulous amounts. This way, the otherwise resource-starving economies of Europe were able to setup global empires due to innovations and advancements in banking. This led to exponential growth of western European economies even in modern times after WW II. Similar bright fate was expected even in the ‘now prevalent’ digital era. To be fair, these economies have been doing well but India seems to have leapfrogged in adopting digital economy, especially under the leadership of Indian Prime Minister Narendra Modi and his drive for Digital India.
Recent data has revealed that in May 2022, UPI recorded transactions worth Rs. Rs 10.4 lakh cr. The growth has been so tremendous that within just the first five months of 2022, the platform has crossed almost 80% of transaction volume of 2021. And as UPI makes entry in to the European Union Market, it will further log phenomenal growth. EU’s acceptance to UPI as a legitimate payments mode has paved a way for India to explore similar opportunities in many other nations across the globe. The expansion is inevitable because of the agility, reliability and instant ease that UPI can provide. Apart from EU, UPI Global is already live in Nepal, UAE, Singapore and Bhutan, while the NPCI International is also in talks to extend UPI services in the United States and Western Asia.
Another fact worth taking note of is that before the indigenously-developed UPI payments method, the country had high dependence on foreign payments platforms. Such a reliance on foreign platforms always resulted in a significant amount of money going out of the country. UPI has reversed this unprecedentedly. The success of UPI lies in its flexibility as it offers users to pay through easy QR codes and quick PINs, while the world still struggles and stays on traditional methods, such as card systems, which are still dominant in developed states across the globe. Cheque payments are still very common in various parts of the European countries. UPI is simple and doesn’t require users to carry anything extra other than their smartphones. RuPay and UPI, together are beating cash and card-based transactions in the country with whopping margins. The continuation of this trend may lead to them taking over the global competitors like American express, VISA and Mastercard, and other Global Giants that have ruled the Indian payment systems for decades. UPI is becoming popular in other foreign countries at a right time, as absence of a similar Open, Simple & Powerful payments interface may leverage India’s position in the foreign markets.
In order take digital payment to every nook and corner of the country, various steps have been taken by MeitY. Incentive schemes like the promotion of RuPay Debit cards and low-value BHIM-UPI transactions (P2M) facilitate Banks in building a robust digital payment ecosystem. Additionally, Incentive/cashback schemes were launched by MeitY for changing the customer/merchant behavior for faster adoption of digital payments in India. Some of them were BHIM Cashback schemes for Individuals & Merchants, BHIM Aadhaar Merchant Incentive Scheme, BHIM-UPI Merchant Onboarding Scheme Merchant Discount Rate (MDR), etc. Another step towards improving digital infrastructure was the scheme titled “Pradhan Mantri Gramin Digital Saksharta Abhiyan (PMGDISHA)” to usher in digital literacy in rural India. Concept of QR scanning for making digital payments has also contributed in increasing the number of digital payments because of the added ease and flexibility.
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