“When using cash, it took double the time to serve each customer as I had to give them the correct change. Sometimes, customers just went away because we did not have change. With QR codes, it is time-efficient and easy for everyone. Customers need not carry their wallets anymore; their mobiles will do,” Vineeth summed up the UPI impact on his business.
A quick recap of the underlying technology will not be out of context here. At the core of Indian digital payments is UPI, based on the JAM (Jan Dhan, Aadhaar and Mobile) trinity. Launched in August 2016 by the National Payments Corporation of India (NPCI), it is an instant, real-time payments (RTP) system that allows interbank peer-to-peer (P2P) and person-to-merchant (P2M) transactions through QR code payments on UPI-linked mobile apps. In brief, UPI has done away with all traditional silos and democratised digital payment in a country of 1.4 Bn.
Vinay Rajak, a software engineer and a regular customer at Vineeth’s stall, leisurely sipped his coconut water and recalled the benefits of the digital payment system. It was particularly helpful and he managed to live cashless for many months without using his credit/debit card.
“From tea and cigarettes to food, rent, utility bills and everything in-between are paid via UPI. It has reduced my dependency on cards and made a big difference in my life,” he said.
VIDEO CLIPS
But it is not the story of India’s Silicon Valley alone. Since the demonetisation in November 2016, people from rural and remote areas were hugely impacted as cash had always been the bedrock of the Indian economy. Still, the country slowly changed tack and moved towards digital payments, especially UPI, due to its ease of use and a no-fee format.
Setting the goal for UPI, India’s finance minister recently averred that UPI target is to cross 1 Bn transactions per day in the next five years.