By Pradeep Bhandari
In the IMF report titled “Growing Retail Digital Payments: The Value of Interoperability,” India’s Unified Payments Interface (UPI) is recognised as the world’s most powerful real-time payments system. In a defining moment of digital dominance, UPI processed a staggering 18.39 billion transactions worth ₹24 lakh crore in June 2025 alone—a feat unmatched globally. With over 640 million digital payments taking place every single day, accounting for nearly 50% of global real-time digital payments, UPI has now surpassed Visa in transaction volumes. Adopted by over 491 million individuals and 65 million merchants, UPI commands an 85% share in India’s digital transactions ecosystem, making it one of the most successful public digital platforms ever created—not just in India, but anywhere in the world.
What began in 2016 as a peer-to-peer transfer tool is now a pillar of India’s digital economy. Championed by Prime Minister Narendra Modi under the broader Digital India initiative, UPI reflects the transformative power of state-led digital infrastructure. It stands as a model for how inclusive policy, backed by technological foresight, can deliver population-scale innovation.
The Vision Behind UPI
Launched by the National Payments Corporation of India (NPCI), UPI was designed to be inclusive, secure, and interoperable. Its foundation was built on the JAM Trinity—Jan Dhan (universal banking access), Aadhaar (unique digital identity), and Mobile (affordable connectivity). This convergence enabled UPI to scale rapidly across socio-economic groups with minimal friction.
Why UPI Worked: Interoperability and Inclusion
Unlike closed digital wallets, UPI offers full interoperability across banks and apps—such as PhonePe, Google Pay, Paytm, BHIM, and WhatsApp Pay. This open-loop architecture delivers a frictionless and user-centric experience.
Merchants benefit too. With zero merchant discount rates (MDR), UPI offers a low-cost digital acceptance tool that has especially appealed to India’s small business ecosystem.
Importantly, UPI isn’t limited to smartphones. With solutions like UPI 123Pay, even feature phone users can transact digitally using IVR and missed calls. This technological extension has turned digital inclusion from policy rhetoric into lived reality.
Programs like PM SVANidhi nudged behavioural change by linking digital incentives—such as cashbacks—to small vendor transactions. The result: broader adoption in cash-heavy, informal sectors and increased transparency in micro-economies.
From Bharat to the World
India’s payment revolution is no longer confined to its borders. UPI is now live in seven countries, including UAE, Singapore, France, and Sri Lanka, with plans to expand into ten more corridors.
The acceptance of UPI in France, a G7 economy, is particularly symbolic. It marks a shift in perception—from India as a user of global technology to a provider of global digital infrastructure. India is also advocating UPI’s adoption across BRICS and G20, aiming to position it as a model for cross-border payments, lower remittance costs, and direct merchant settlements.
Crucially, UPI is not a commercial product—it is a sovereign digital utility. While Western fintech systems are typically proprietary and profit-driven, UPI is open, secure, and public by design. It serves as a compelling case study for digital public goods at scale.
The Infrastructure That Enabled It
This scale wasn’t accidental—it rode on a decade of deliberate investment in digital infrastructure.
● Jan Dhan Yojana brought over 55.83 crore people into the formal banking system.
● Aadhaar enabled biometric authentication for over 142 crore citizens.
● India’s mobile data costs—averaging ₹9.34 per GB—remain among the lowest in the world.
● 5G rollout has activated 4.74 lakh base stations, powering low-latency, real-time digital transactions.
Regulatory foresight also mattered. The Reserve Bank of India ensured stability and consumer protection, while NPCI’s agile technical upgrades reduced transaction times to 10–15 seconds as of June 2025.
What’s Next: Credit, Security, and Literacy
The next chapter of UPI is already unfolding. One major upgrade is the integration of credit lines, allowing consumers and small businesses to transact directly from pre-approved credit facilities—potentially transforming access to working capital for India’s 6.3 crore MSMEs.
At the same time, AI-powered fraud detection systems are being scaled up to protect the growing user base. On the international front, India is advocating for standardising UPI protocols across BRICS and G20 platforms, laying the groundwork for interoperable global digital payments.
Parallel efforts in digital financial literacy—especially in rural and semi-urban areas—aim to move beyond mere transactions to a culture of saving, investing, and insuring digitally.
UPI as a Digital Heritage
UPI is no longer just a payments platform. It is a part of India’s digital dharohar—a living example of how public policy, inclusive infrastructure, and innovative technology can converge to drive transformation at population scale.
As countries worldwide search for scalable digital finance solutions, India’s UPI stands as both proof of concept and proof of ambition. It is not only reshaping how Indians transact—it is redefining what is possible in public digital infrastructure.
The writer is National Spokesperson of Bharatiya Janata Party(BJP)
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