Why in News?
The RBI’s Payment Systems Report (H1 2025) shows UPI leading in transaction volume (10,637 crores, ₹143.3 lakh crore), RTGS dominating large-value payments, NEFT growing steadily, while debit card usage declines, highlighting the rapid rise of digital payments in India.
Description:
About UPI:
- Type: Real-time mobile payment system.
- Developed by: National Payments Corporation of India (NPCI).
- Launch Year: 2016 (by RBI & NPCI).
- Function: Links multiple bank accounts into a single app for seamless peer-to-peer (P2P) and merchant transactions.
- Authentication: Two-factor authentication using a Virtual Payment Address (VPA) — no need to share bank details.
Technological Base:
- Built on: IMPS (Immediate Payment Service) and integrates Aadhaar Enabled Payment System (AePS).
- IMPS: Enables instant interbank transfer.
- AePS: Allows basic banking via Aadhaar (withdrawal, deposit, transfer, balance inquiry).
- App Example: BHIM (Bharat Interface for Money) — UPI-based app by NPCI.
Global Expansion:
- UPI now operational in 7 countries — UAE, Singapore, Bhutan, Nepal, Sri Lanka, France, and Mauritius.
- France launch marks UPI’s entry into Europe.
- India promotes UPI integration across BRICS nations to boost remittances and payments abroad.
Nodal Agencies:
- National Payments Corporation of India (NPCI) – Developer.
- Regulated by: RBI and Ministry of Electronics & IT (MeitY).
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