UPI Revolution: India Leads the World in Fast Payments

0:03 Spotlight. This is Akashwani. In the program spotlight, now we bring you a discussion on UPI revolution. India leads the world in fast payments. The participants are Shhat Kohli, economic analyst and Niharikwhania, anchor. Good evening and welcome to today's episode of Spotlight. Today we put the spotlight on India's UPI revolution. Given that UPI handles 640 million plus transactions every day, we have a good reason to have a detailed conversation around this too. Let me first welcome our expert for this evening, Mr. Shhat Kohi, economic analyst. Good evening Shahhat and thank you so much for joining us on Spotlight today. Uh good evening Niharika and good

0:49 evening to all the listeners of Akashwari. So since we're talking about UPI today, it has brought in quite a revolution in our country. It was launched in 2016 and I believe two of the major goals or uh you know two of the major drivers of this initiative of financial inclusion and second having every citizen in our country open a bank account. So can you briefly talk to us about how did the idea come about and what is the vision that keeps fueling that keeps empowering this initiative? I think what started uh with the two objectives that you mentioned financial inclusion and of course you know connecting people to the banking system and you know making an average Indian who lives in the remote corner of the country to be more financially literate and be connected to the mainstream of the entire financial ecosystem shall I say it evolved from

1:36 there and then as it progressed over the last 9 or 10 years we found that UPI has become a revolution in fact I've been calling it utkrish payment of India because it It has just been a magic and the magic has been such that if you look at the volumes today, I think the volumes will will itself spell out the kind of change it has done to our entire country and its economy. 64 as you rightly said 64 cr transactions a day which is almost 1,900 cr transactions a month is not a mean task. If you look at the value of transactions niharika 24 lakh cr r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r rupees a month and it is very soon because the kind of growth we've seen 32% growth over the previous period I am

2:22 anticipating it is it'll easily cross 25 lakh crores a month very soon and you know I I'll give you an interesting aspect of this number 25 lakh cr if we put it on a year is 300 lakh cr rupees and you know our economy is about 4 trillion plus now incidentally when we convert $4 trillion to rup rupees it comes to about 350 lakh cr rupees and a little less here and there and I mean the dollar value keeps fluctuating with regard to the rupee. So just to put it in perspective and uh make an interesting comparison of numbers, our UPI annual transaction value very soon will cross our GDP value in terms of the total numbers. Although the two numbers may not have any direct correlation, but we should not forget that every 1% rise in UPI transactions brings about 0.03%

3:11 impact on the GDP. So if we say that the UPI transactions have risen by 32%. Obviously you can imagine the kind of contribution it's making to GDP. So I think for me UPI is magic for me UPI is resolution. For me UPI is something which the world is looking at. Very rightly said. In fact in one of his speeches the prime minister has also mentioned that UPI today has become a status symbol for Indians. Let's quickly listen to what he said. empowerment. Social justice

4:10 status upmal. So there you go. There it was laid out for us neatly. But you know this kind of an interface requires quite a lot of digital groundwork. So what kind of digital groundwork went into building such a huge interface in the first place? Well, starting with government of India, I would like to complement uh National Payment Corporation of India and Reserve Bank of India. The two organization or two institutions shall I say which are absolutely controlling the whole system and the way it has evolved well when you open your app and when you make a transaction of UPI, it may appear to be very simple and people get surprised when they see all their bank accounts because they're linked to Aadhaar. So

4:55 they get collated into their UPI. So I think from being semi-automatic uh when it evolved it has now become almost fully automatic. That is all you need to do is to just to inform about your Aadhaar number, your PAN number, your name, your mobile number and I think Niharika if you ask me honestly the Jam the called the JAM trinity I think that has significantly contributed in evolution of UPI which is called Jandhan, Aadhaar and mobile. The moment these three things came together, of course, Jandhan was part of financial inclusion exercise but Aadhaar mobile linkage has propelled the whole UPI format. I think that is what has made a difference and Niharika this is despite the fact that the penetration of mobile phones in our country is about 66 crores. So which means smartphone usage

5:41 out of 142 cr population 66 cr people have smartphones. I'm talking of smartphones not mobile phone connections. But if you talk of the households, we've got about 25 cr plus or 26 cr households. 85.5% households have at least one smartphone. So if you've got a smartphone, your father has, your mother has, your your brother or sister, anyone who has a has a smartphone, I think that works. The family system that we have in this country, that works for the whole family. So I think the penetration of UPI when we say that 85% of the digital transactions are happening through UPI is because the penetration of a smartphone has been so much and of course the fact that it has become so easy there was a time nihar I remember when the UPI came up there were a lot of people who were very hesitant they were

6:26 they said it's very complicated I have to create my UPI ID and knowing that financial literacy in India digital literacy in India technology knowledge in India is not as you know deep as one would imagine. So they used to find it very complic but the ease with which it has come up I think from buying a coconut from roadside as I said to to making smallest of payments it just happened. I found a young you know group of people instead of missed calls I found that they were tossing on one rupee test payments to each other which were proving to be more attentive attention drawing shall I say instead of a missed call they said our miss calls don't work we just send one rupee and it hardly cost you anything and you know the the receiver suddenly gathers attention and you know that's how the communication happens interestingly isn't it very interesting in fact you know you

7:11 touched upon two very very relevant aspects so one is that for using UPI there is no additional fees there is no addition service charge whereas other media you might have those you might have a few extra rupees here and there so if you're sending somebody a payment of 10 rupees uh it will get transferred as such and the second is interoperability so UPI connects 675 banks on a single platform which means that there have to be different systems that can be brought together on a single platform to make it work so do you briefly also want to talk about that aspect of UPI absolutely you know from the time when UPI started we all remember Those payment wallets, these used to carry money. You had to park your money on these wallets and the digital payment system was already there because you were making payment from one wallet to

7:57 the other. But the difference was that you had to pull out money from your bank, park it in the wallet and then the safety issues came because the money had gone from your pocket from your bank and they were we used to hear a lot of cases of the wallets being hacked or wallets being not being reachable or you know because of connectivity various things happening. I think the most comfortable position was that money should lie with you at your bank safely. If I'm unable to do a transaction because of connectivity, because of network, at least I know my money is lying with you. But in that scenario, money had already left your bank. So these wallets, they suddenly found themselves to be redundant because there was no need for a user to park money in the wallet. So now it just happens. It moves from your bank and hits the bank of the receiver. I think so these wallets are playing the role of intermediaries facilitating UPI.

8:43 So I think the whole paradigm of this wallet system has been changed because of UPI is what I would like to say. In fact, I was going to ask you what is the basic difference between a digital wallet and UPI. In one line, do you want to summarize that for us? Well, I would I would expand your question to include as to how a pre-UPI era was. We were issuing checks. We were issuing we were using debit cards. Not that we are not using now. We were using credit cards. we were using net banking. I would very strongly like to say that the era of these kind of payments has been faded because of UPI. I mean UPI has sort of overshadowed these payment. These payments are still happening but the quantum of use of these mediums is gradually coming down. I think UPI is overtaking them and uh digital payment

9:28 as I said download a wallet on your phone you offload money from your bank pocket on the wallet and then the other person also needed to have that wallet because if the other person didn't have that wallet you couldn't send the payment but here you are in a system all you need is a bank account and you know with Jandhan the penetration of Jandhan over the last few years I remember when Jandhan was started as a financial inclusion exercise by the prime minister there were a lot of comments from people people don't have money so what are what are they going to do with the Jandhan account? How will no balance help because people don't have money to keep them India is a poor country. you know all sorts of comments came but then finally today I think people cannot ignore the importance of Jandhan because as I said the jam trinity has been has been one of the key drivers of UPI Jan

10:13 Aadhaar and mobile and the linkage of Aadhaar to mobile I think that has also done wonders well people say what's the point of linking I remember when mobile was being linked with Aadhaar lot of people used to say what is the point of linking Aadhaar with mobile tomorrow I change my mobile number tomorrow I might change my address and so and so but today This whole system has sort of got a common umbrella and that umbrella within that umbrella UPI is thriving is what I would like to say. In fact, there have been so many questions about privacy. Now UPI is an interface which depends heavily on data personal or banking. So has there ever been a question of safety of using this method of payment and how do we keep all of that data safe? Well Niharika you know in technology they say that the moment you invent technology invent a technique there's always somebody making

10:59 an attempt to break it that is go one step forward but UPI managed by NPCI and RBI has been very very comprehensive in this you know the firewalls and the protection about the privacy of the data has been very securely inducted in there but when you hear cases that probably my money moved out from a bank or probably that money moved without my consent I think that is more due to the negligence of the user itself. So I think through this program today I would like to convey to the users that when you are using UPI please make sure that you are using it very carefully. You should not be very casual. Of course because of repeated usage people are very quick. It takes just two to three seconds to make the payment. But sometimes because to save time and to show that look how skilled I am to make this payment how

11:45 quickly sometimes you know you can you can tend to make mistakes if you so or while doing your KYC of UPI. Suppose there's a mistake in punching in the Aadhaar, there's a mistake, there could be a mistake in punching in the PAN number for some place, there could be a mistake in punching your bank account number and so and so forth. So I think safety issue comes when the users become a little careless. So my advice is that while using UPI, it is so good, it is so easy, it is so quick, but it also has to be very very carefully handled. And of course safety starts with us first. Absolutely. So before we close the conversation, UPI is making its presence felt across borders. It's already live in seven countries including UAE, Singapore, Bhutan, Nepal, Sri Lanka and I think most recently France that is UPI's first foray into the continent of

12:33 Europe. So I would like to know a little about that as also what is the future vision that we see for UPI? Well, if you ask me personally, I would like to see UPI becoming a global payment platform. Why just France? Why just Sri Lanka? Why just Bhutan, Nepal and so and so, why just UAE? Because this is a technology I feel that if there is something good which has happened, if a good invention has happened across the world, then everybody would like to adopt it. So it's just a matter of time and wherever prime minister travels by the way on one of the things that she discusses about India, we talk about there's a lot of things you can you can just go on on and on about India. But now one of the things to speak about India is UPI which is why I call it as Utkish payment interface because I think this is India's gift to the world. So if you ask me the where's the future of UPI I see

13:19 UPI penetrating to most parts of the world and if the developed world is adopting it well nobody can question its uh efficiency nobody can question its safety nobody can question its greatness as far as the system is concerned. Very well. I do feel that we will need a second part to this conversation because we just started. We haven't yet discussed the advantages as also so many more things but I believe we will have to wind up right now. So thank you so much Shahhat for joining us on spotlight this evening. It's been an absolute pleasure to be in conversation. My pleasure too. Thank you. You were listening to a discussion on UPI revolution India leads the world in fast payments. The participants were Shhat Kohli economic analyst and Niharik Bhwania anka. This program was produced and presented by the news services

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