Table of Contents
It was the year 1994, and the Stanford Federal Credit Union in the US was the premier financial institution in the world that brought revolutionary technology to its members. The technology was all set to transfigure the entire gamut of payments. The so-called technology was called internet banking service. It has been more than twenty-five years now, and internet banking or online banking has made a sea of difference to human civilization.
When did it all start in India?
Fast forward sixteen years, and it was in November 2010 that online or mobile payments entered Indian households. The first form of electronic transfer that the Indian population experienced was IMPS or Immediate Payment Services. People could now transfer money 24×7 from one bank to another through interbank electronic fund transfer. And customers could use their mobile phones to carry out online payments. But before IMPS made its entry into the online payment scene, the concept of e-commerce was already introduced in India.
- A milestone to be proud of – India’s first e-commerce site was launched in 1999.
- The first payment aggregator came into the scene in 2000. Another horizon that made the Indian technical professionals stand tall and proud.
- The next iconic milestone was the beginning of the first Indian website in the e-commerce gamut. The year was 2007, and a startup company introduced the world to online shopping from one centralized platform in the virtual world.
- In the year 2009, a Gurgaon-based digital payment company entered the scene using a payment app downloaded on the user’s mobile. In 2013, the same company was one of the few leading companies in India to start their digital wallet under the consent of the Reserve Bank of India, the country’s apex banking body.
2016 – A turning point in India’s journey towards digitalization of payments
2016 turned out to be a major watershed moment in India’s digital payment history. This was the year when the Government of India launched the UPI or the United Payment Interface. It truly was a revolutionary moment especially gauged by the response the system got within the next few years. UPI apps were launched, which became a craze across the country. As a result, UPI payment became a major reckoning force in the Indian online payment gamut in the next couple of years.
As per statistics,
- By August 2021, UPI payments were about 10% of all the retail payments, online and offline, in India.
- By December 2020, about 207 banks in India accepted UPI transactions.
- In the thirty-seven months of operation, beginning 2016, the system has enabled transactions worth about INR 17.29 lakh crore.
- In May 2021, the UPI platform had about 100 million users actively using the platform. As per the plan, the objective is to get about 500 million active users by 2025.
After UPI was launched and adopted, the payment gateway industry quickly integrated UPI platforms into their payment offerings.
What is UPI?
UPI is a Unified Payment Interface which is a real-time instant payment system. In India, UPI was developed by the NPCl or the National Payments Corporation of India. The system carries out peer-to-peer transactions between banks and person-to-merchant transactions too. RBI regulates the system. One of the biggest advantages of the system is that it encourages instant funds transfer using a mobile between two bank accounts. Not just that, the increasing use of UPI supports the green initiative of the government of India as it helps in the reduced usage of paper.
What has worked in favor of UPI in India?
Two things that pushed UPI towards mass popularity in the second-most populated country in the world are:
- The ease of usage and transaction, and
- The wide-ranging utility of the platform.
For example, if you reside in Tamil Nadu and are a user of TNEB (Tamil Nadu Electricity Board). In that case, you can use any trusted UPI app to make your TNEB online payment really fast and conveniently. With many third-party payment companies coming forward to associate with banks and FIs and offer customers seamless payment opportunities, online payment has become the first choice for most Indian users. So, choose wisely before making a payment online!
