UPI: Revolutionizing the digital payment system in India: A critical review

Abstract

Demonetization paved way for the growth of the digital payment system in India. The government of India launched the Digital India initiative in 2015 with the objective to create a digitally empowered society that is cashless and paperless. UPI is a new digital payment instrument that redefines the way people can make payments. It is one of the most advanced, innovative, user-friendly, convenient, safe and cost-effective payment system developed by the National Payment Corporation of India in 2016. However, it suffers from some challenges, such as lack of digital literacy, lack of awareness of such payment instrument, and security issues. Regardless of such challenges, UPI has emerged as a game changer in the digital payment space in India. It has a great perspective to offer great opportunities to businesses as well as customers. This paper will give an overview of the functioning, issues associated with UPI, opportunities and future prospects of UPI payment system in India.