Unified Payment Interface—An Advancement in Payment Systems

Abstract

This paper studies Unified Payment Interface (UPI), a new age payment system introduced in India by National Payment Corporation of India. Unified Payment Interface is a mobile centric, real time interbank payment system which has the potential to transform and universalize digital payments in India. The paper traces the evolution of payments systems in India and examines in detail the technology behind Unified Payment Interface focusing on its architecture and security systems through empirical and theoretical literature review. UPI is a significant advancement as compared to extant payment system in terms of cost, ease of use for consumers, settlement times and security and has witnessed good user adoption. Its modular API based architecture will enable development of innovative solutions for consumers and businesses. UPI is currently in its infancy stage and development of merchant centric UPI solutions will greatly increase the user adoption. UPI can help bring a large part of the population within the ambit of digital economy and can be a great tool for financial inclusion in India.