IMF crowns UPI as the world's fastest payments system: What are the four steps to adopt it?

Kolkata: United Payments Interface, which was introduced in India on April 11, 2016 has beaten all other payments system in the world in well short of 10 years. Introduced by the National Payments Corporation of India (NPCI) to promote digital payments and financial inclusion in the country widely perceived as a laggard in technology, UPI has achieved a lightning dash like Usain Bolt and the feat has now been crowned by the IMF as a world-beater.

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A fintech note titled 'Growing Retail Digital Payments: The Value of Interoperability' put in the public domain by the IMF mentioned "India now makes faster payments than any other country. At the same time, proxies for cash usage have fallen... UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India."

To speed up transactions, NCPI recently reduced times to reverse transactions done by mistake (payments reaching an unintended person/bank account) to make the process even faster and smoother.

The annual report of the Reserve Bank of India for FY25 stated that 185.8 billion transactions took place in the last financial year, registering a 41% year-on-year jump while the value of those transactions rose to Rs 261 trillion, compared to Rs 200 trillion in the year before (FY24).

The instant and real-time payment system has attracted attention outside the borders of India so quickly that as many as seven countries have allowed it to be used as valid for international payments. These are UAE, Singapore, France, Bhutan, Nepal, Sri Lanka and Mauritius. The footprint of UPI is set to grow since IDFC First Bank has allowed is NRI customers to make UPI payments with international SIM cards from 12 countries -- Australia, Canada, France, Hong Kong, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, United Arab Emirates (UAE), the UK and the US. The NRIs must have NRE and NRO accounts in this bank.

For those who are still sitting on the fence and hesitant to adopt the technology, here are the very basic steps that one needs to set up the payments system on a smartphone. What you need for this are a smartphone and a savings account in a bank.

ONE: Fist choose a UPI app from the few players in the market. These are BHIM, Google Pay, PhonePe and Paytm. These are available in Google Play Store or Apple App Store.

TWO: Install the app and register your mobile number. Remember this phone number should be linked to your bank account. An SMS will be sent to your phone to verify the number.

THREE: Now the bank account has to be linked by typing in the account number and IFSC

FOUR: Type in a UPI PIN. This is like your debit card PIN and you are free to create it.

Once these four steps are done you can start transacting. You can select the person to pay by scanning a QR code, or pay to a phone number or even to a bank account. the apps have provision for all of these. However, you must check the identity of the person/phone number/bank account you are paying to before pressing the pay button and typing in your PIN to make the payment. NCPI has also announced a few steps to ensure safe payments in UPI.