In this new generation of smartphone technology, one of the most useful innovation technologies was the introduction of digital payment systems. With the help of UPI, India moved a step ahead towards a cashless economy and a revolution made in the Indian Banking System. This abstract is about how people use UPI as a form of digital payment and the challenges and benefits our society faces. Please look at my previous abstract on the UPI payment system, which gives you a brief idea about the UPI payment system.

As Internet usage has increased rapidly since 2013, digital payment has additionally come into subsistence. The payment system firstly shifted from the traditional payment methods into Electronic Payment through Debit and Credit cards, Electronic Payment options through internet Banking and then further peregrinate to Mobile Payment method through M –Payment technologies. In Figure1, The volume of total mobile internet users in India and its penetration in 2013 was 18% (219.92 million) from the total population. Which was significantly growing, and in 2017 it was 33%(424.22 million) and then 57%( 768.99 million) in 2020. When we looked into the total number of UPI transactions, drastic change in numbers from FY2016-17 to FY2017-18, i.e. 18 million to 915 million with a growth of 4984% and then 5392 million (with an increase of 489%) in FY2018-19. 132% (12519 million) growth in UPI users in 2019-20 and 78%( 22331 million) increase in 2020-21.

Figure 1, Growing Number Mobile Internet Users

Benefits of UPI:

  • By using a UPI pin, we are making the most secure payment or transfer money. The UPI is the cheapest, and the transaction change is too low that most banks and payment apps have made it free.
  • The most significant advantage in the UPI payment is that we can send payment at one time or request money to another. It deposits the amount in your account in a fraction of seconds or sends the amount to another account.
  • UPI supports almost all banks. We can do transactions by UPI supports banks which is very easy without any charge.
  • The payment apps and banks also provide cashback offers to promote UPI transactions. If you send the payment through the UPI method, you are given some cashback in the form of cash or vouchers.
  • In the UPI payment System, UPI ID or VPA is used instead of bank account number or card number. You do not need to give the account number to get or receive the money.

Challenges we are facing:

  • UPI payment is a deal for small fund transfers. But when the higher amount we want to transfer, a different mode of online transfer is preferred.
  • You don't have to share personal data like date of birth, the UPI PIN and any other information with any other person so that your account will be secure.
  • When the bank server is down, it will take lots of time (sometimes more than 48 hours) to settle the transactions. Your payment will come back or go into the beneficiary account after the settlement of the transaction. If you do not get the amount, you can contact your bank.
  • The daily transaction limit for UPI transactions is up to ₹1 Lakh as much as possible.
  • If you work on slow internet and make transactions by UPI payment methods, it will be stuck in the middle of your payment and will not be compliant again. You may face a plethora of difficulties here.
Figure 2

From the latest data by the National Payments Corporation of India (NPCI) on UPI payments, Figure 2 describes top remitter banks' business and technical decline. Remitter banks are the banks of the account holder who is sending the money. Here business declined refers to the transaction failed due to entering an invalid pin, wrong beneficiary account number, exceeding transaction limit, exceeding the number of transactions per day etc. In simple words, we can say the transaction failed because of customer fault, which is not due to the bank's technical reason or NCPI. The technical decline of the transaction is due to the unavailability of systems and network issues on the banks or NPCI side. In Aug '21, when we looked into Central Public Sector Units (PSUs) Banks, UCO Bank customers were at the top rank who faced many issues while sending money via UPI. 7.29% of the transactions (2.7 million) failed due to technical reasons, whereas 6.81% (2.5 million) were business decline transactions. Then Punjab and Sind Bank have shown 6.98% (0.5 million) technical, and 10.83% (0.8 million) business declined transactions, followed by Punjab National Bank 5.51% (9.6 million) and 8.30% (14.4 million), Indian Bank 4.31% (3.7 million) and 14.37% (12.4 million), State Bank Of India 2.66% (27.1 million) and 6.73% (68.5 million), Union Bank of India 2.05% (3.5 million) and 8.26% (14.1 million), Bank of India 0.76%(0.98 million) and 4.82%(6.23 million), etc. For other top remitter banks, Table.1 gives the brief statistics for August 2021.

UPI Remitter Banks (August-2021)

Total Volume (In Mn)

Approved %

Business Decline  (In Mn)

Business Decline  %

Technical Decline (In Mn)

Technical Decline%

HDFC BANK LTD

314.36

95.00%

14.8

4.71%

0.9

0.28%

Axis Bank Ltd.

235.25

95.92%

8.5

3.62%

1.1

0.46%

ICICI Bank

217.79

94.79%

11.2

5.13%

0.2

0.08%

Paytm Payments Bank

212.37

95.07%

10.1

4.74%

0.4

0.19%

Kotak Mahindra Bank

129.15

93.82%

7.2

5.58%

0.8

0.59%

IDBI Bank Limited

53.18

93.84%

3.1

5.76%

0.2

0.40%

Airtel Payments Bank

46

86.55%

5.7

12.43%

0.5

1.02%

Yes Bank Ltd

40.43

95.69%

1.5

3.69%

0.3

0.63%

Federal Bank

40.38

94.94%

2.0

4.91%

0.1

0.15%

Karnataka Bank

34.56

87.10%

2.7

7.81%

1.8

5.10%

INDUSIND BANK

28.76

92.41%

2.1

7.30%

0.1

0.29%

Karur Vysya Bank

21.88

91.33%

1.8

8.34%

0.1

0.33%

India Post Payment Bank

20.39

85.99%

2.7

13.28%

0.1

0.73%

IDFC FIRST Bank

19.85

91.98%

1.4

7.24%

0.2

0.78%

Bandhan Bank

14.67

87.52%

1.1

7.17%

0.8

5.31%

South Indian Bank

14.2

93.78%

0.9

6.15%

0.0

0.08%

Citibank

13.2

93.88%

0.6

4.45%

0.2

1.67%

DBS Bank India Limited

12.21

94.81%

0.6

4.85%

0.0

0.34%

Fino Payments Bank

12.2

80.52%

2.2

17.80%

0.2

1.68%

City Union Bank

11.49

92.91%

0.8

6.80%

0.0

0.29%

Standard Chartered

10.27

96.51%

0.3

3.08%

0.0

0.41%

Andhra Pradesh Grameena Vikas Bank

9.23

77.79%

1.7

18.89%

0.3

3.31%

Ujjivan Small Finance Bank

8.5

91.27%

0.7

7.89%

0.1

0.84%

Tamilnad Mercantile Bank

8.5

80.30%

0.7

8.29%

1.0

11.41%

Saraswat Bank

7.9

94.79%

0.4

4.63%

0.0

0.58%

Pragathi Krishna Gramin Bank

7.66

82.43%

1.3

16.76%

0.1

0.82%

Equitas Bank

7.41

84.33%

1.1

15.24%

0.0

0.43%

Maharashtra Gramin Bank

7.13

81.05%

1.2

17.00%

0.1

1.94%

AU small Finance Bank

6.96

93.08%

0.4

6.46%

0.0

0.46%

Andhra Pragathi Grameena Bank

6.56

63.86%

2.2

33.99%

0.1

2.15%

Jammu and Kashmir Bank

6

86.67%

0.6

9.63%

0.2

3.70%

Kerala Gramin Bank

4.99

85.75%

0.7

13.47%

0.0

0.78%

Rajasthan Marudhara Gramin Bank

4.96

82.80%

0.8

15.43%

0.1

1.77%

RBL

4.57

90.82%

0.4

8.44%

0.0

0.74%

Sarva Haryana Gramin Bank

4.24

87.70%

0.3

7.75%

0.2

4.55%

Baroda Rajasthan Kshetriya Gramin Bank

4.15

84.63%

0.4

9.48%

0.2

5.89%

ESAF Small Finance Bank Ltd.

4.1

90.93%

0.3

7.22%

0.1

1.85%

Purvanchal Bank

4.08

75.94%

0.8

20.56%

0.1

3.50%

(Table.1 Remitter banks Statistics, Source: NPCI)
Figure 3

Figure.3 gives the detailed technical and business decline transactions at the receiver end. UCO Bank was the highest percentage 5.19% (1.2 million) of technical decline transactions in Aug '21 and 2.34% (0.5 million) of business decline from all public sector receiver banks. Punjab National Bank was the second-highest 4.35% (4.1 million) technical and 0.66% (0.6 million) of business decline occurred followed by State Bank of India 3.09% (16.5 million) and 0.47% (2.5 million), Punjab and Sind Bank 3.09% (0.1 million) and 0.61% (0.03 million), Canara Bank 0.55%(0.52 million) and 1.07%(1.02 million), Indian Bank 0.50%(0.22 million) and 0.51%(0.23 million), etc. For other top beneficiary banks, Table.2 gives the brief statistics for August 2021.

UPI Beneficiary Banks (August-2021)

Total Volume (In Mn)

Approved %

Business Decline (In Mn)

Business Decline %

Technical Decline (In Mn)

Technical Decline%

Tamilnad Mercantile Bank

5.88

87.02%

0.06

1.09%

0.63

10.72%

Sarva Haryana Gramin Bank

2.6

89.92%

0.03

1.03%

0.23

8.67%

Bandhan Bank

10.26

93.91%

0.09

0.92%

0.50

4.86%

Jammu and Kashmir Bank

2.86

94.71%

0.05

1.84%

0.09

3.16%

Karnataka Bank

20.02

94.60%

0.24

1.22%

0.57

2.84%

Baroda Rajasthan Kshetriya Gramin Bank

2.62

92.82%

0.06

2.39%

0.07

2.83%

Andhra Pradesh Grameena Vikas Bank

5.13

97.02%

0.01

0.26%

0.10

1.98%

Maharashtra Gramin Bank

3.74

97.59%

0.03

0.69%

0.05

1.45%

Fino Payments Bank

5.32

94.35%

0.23

4.27%

0.07

1.37%

Andhra Pragathi Grameena Bank

3.46

83.25%

0.52

14.90%

0.04

1.10%

Rajasthan Marudhara Gramin Bank

3.07

98.04%

0.01

0.42%

0.03

0.91%

ESAF Small Finance Bank Ltd.

2.66

98.65%

0.01

0.56%

0.02

0.65%

Saraswat Bank

4.26

98.58%

0.04

0.87%

0.02

0.48%

Airtel Payments Bank

43.1

98.01%

0.61

1.41%

0.16

0.37%

Ujjivan Small Finance Bank

5.62

98.62%

0.04

0.72%

0.02

0.36%

RBL

3.5

95.56%

0.14

4.06%

0.01

0.35%

India Post Payment Bank

11.85

98.91%

0.07

0.59%

0.04

0.33%

Axis Bank Ltd.

292.54

98.86%

1.11

0.38%

0.76

0.26%

Kerala Gramin Bank

3.22

98.96%

0.02

0.54%

0.01

0.23%

IDBI Bank Limited

32.24

98.88%

0.27

0.84%

0.07

0.21%

Standard Chartered

2.99

98.29%

0.04

1.45%

0.01

0.21%

City Union Bank

7.68

97.91%

0.14

1.88%

0.01

0.19%

Lakshmi Vilas Bank

2.6

98.89%

0.02

0.73%

0.00

0.19%

AU small Finance Bank

6.3

98.99%

0.04

0.69%

0.01

0.16%

Kotak Mahindra Bank

76.74

98.08%

1.20

1.57%

0.12

0.15%

Pragathi Krishna Gramin Bank

4.57

98.97%

0.02

0.42%

0.01

0.14%

Karur Vysya Bank

15.74

99.00%

0.13

0.80%

0.02

0.12%

IDFC FIRST Bank

12.36

98.67%

0.13

1.09%

0.01

0.12%

DBS Bank India Limited

5.84

95.19%

0.26

4.50%

0.01

0.11%

Equitas Bank

4.44

98.65%

0.05

1.04%

0.00

0.11%

HDFC BANK LTD

199.42

97.90%

3.77

1.89%

0.16

0.08%

South Indian Bank

10.62

98.19%

0.19

1.76%

0.01

0.06%

Paytm Payments Bank

642.43

99.53%

2.70

0.42%

0.19

0.03%

Yes Bank Ltd

450.54

99.90%

0.27

0.06%

0.09

0.02%

INDUSIND BANK

38.56

98.49%

0.31

0.80%

0.01

0.02%

ICICI Bank

323.98

99.10%

2.69

0.83%

0.03

0.01%

Federal Bank

70.29

99.86%

0.08

0.12%

0.01

0.01%

CITI

6.28

99.85%

0.00

0.00%

0.00

0.00%

(Table.2 Beneficiary banks Statistics, Source: NPCI)