Cash is no longer the King? How UPI is replacing cash in semi-urban and rural India | Mint
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Business News/ Money / Personal Finance/  Cash is no longer the King? How UPI is replacing cash in semi-urban and rural India
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Cash is no longer the King? How UPI is replacing cash in semi-urban and rural India

UPI has triggered a financial revolution across India, and this change is even more evident and significant in tier 2 and 3 regions where cash was essentially the only plausible medium of transaction

National Payments Corporation of India (NPCI) launched four new UPI features last month. (istock)Premium
National Payments Corporation of India (NPCI) launched four new UPI features last month. (istock)

Unified Payments Interface (UPI), India's home-grown payment system, has emerged as the front-runner among all the modes of digital payments. The volume of UPI transactions has increased multi-fold since its launch in 2016. Not only is urban India, but UPI has spread its pangs in semi-urban as well as rural India slowly and steadily displacing traditional cash transactions. There is no better validation of this change than the remarkable surge in UPI transactions from a mere 1.8 crore in FY 2016-17 to a staggering 8,375 crore in FY 2022-23.

“In the heartlands of semi-urban and rural India, a digital revolution quietly unfolds as UPI, the Unified Payments Interface, emerges as a powerful force, gradually but decisively displacing traditional cash transactions. In these communities where cash was once king, UPI is swiftly becoming the preferred monarch," said Shikhar Aggarwal Chairman, BLS E-Services.

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Experts say that UPI's user-friendly, mobile-based platform has transcended language barriers and complex banking procedures, making it accessible to a wide range of individuals, many of whom are entering the formal financial system for the first time.

In the words of Shikhar Aggarwal, 'It's a transformation driven by technology but fuelled by the aspirations of millions, bridging the digital divide and offering a path to prosperity that was previously unimaginable."

UPI is not just replacing cash; it's ushering in a brighter, more inclusive future where financial independence is within reach for all, thanks to the fusion of technology and vision, added Shikhar Aggarwal.

UPI has triggered a financial revolution across India, and this change is even more evident and significant in tier 2 and 3 regions where cash was essentially the only plausible medium of transaction.

Also Read: State Bank of India customers alert! Facing snags with SBI UPI? This could be the reason

“Banks and ATMs are not as well-distributed in these regions as in tier 1 cities - it was not as easy to access one’s money. This is also why, people preferred to keep their money with themselves, rather than in their savings accounts - making long-distance transfers all the more difficult," said Satyajeet Kunjeer, Founder and CEO, Deciml.

Alternatively, no other digital platform had managed to have as much of an impact either, he added.

Four new UPI features launched in September 2023

National Payments Corporation of India (NPCI) launched four new UPI features last month. 

Hello! UPI: To enable users to make voice-enabled UPI payments via apps, telecom calls, and IoT devices in Hindi and English. 

Credit line on UPI: This facility enables customers to access pre-sanctioned credit from banks via UPI.

LITE X product: Users can send and receive money offline

UPI Tap & Pay facility: Simply tap Near Field Communication- (NFC-) enabled QR codes at merchant locations to complete your payments.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

 

 

 

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ABOUT THE AUTHOR
Sangeeta Ojha
A business media enthusiast. Writes on personal finance, business and banking.
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Published: 16 Oct 2023, 09:05 AM IST
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