Unified Payment Interface (UPI) is a system that empowers the user to do cashless transactions through mobile banking application. It does not matter in which bank the users have account, UPI is like a bridge which connects them both. It leads to immediate money transfer 24*7, avoids hustle to reach ATM to withdraw cash, enables utility bill payments, donations through the usage of mobile number, QR code or UPI id. One is required to have only a smart phone with internet facility.
The benefits of using apps like Gpay, Phone Pay, BHIM UPI is that along with the transactional benefits, it also allows user to check transaction history, check balance (for which previously passbook entries had to be done), use auto-pay facility etc. These digital transactions have gone a long way in promoting financial inclusion because now even the smallest shopkeepers, vegetable sellers, street hawkers are using it. They can keep a track of the money inflow and outflow easily. Preparation of simple cash flow statement for such sellers and calculation of profit/loss has also become easy.
If we talk about reasoning behind such wide usage of digital transactions by small sellers, we can say that because youngsters are tech savvy, they have taught their parents as well to use such applications. Now, because the purchasers are using the apps to pay, the seller has to be tech savvy to serve the customer. So the cycle continues.
Many new bank accounts are also opened now to cater to this need of the market which is again a welcome step. This financial inclusion also impacted Gross Domestic Product of the country because now the transactions that previously went unnoticed on account of cash dealings also became part of National Income. So, this micro step has led to macro benefits to the country as a whole hence the same be promoted as much as possible.
