From the time the National Payment Corporation of India (NPCI) made their grand launch of the  unified payment interface (UPI) in 2016 people have been very enthusiastic about how this medium of money transfer will have a major impact on the Indian economy in ways that are dream-like. UPI is basically a payment platforming that facilitates money transfers between any two bank accounts with banks that are on its network. Banks like AXIS Bank and ICICI Bank already have smartphone apps that allow people to transfer money through the UPI interface. But the startup ecosystem is already in its maturity state and will not have much to benefit from the UPI system. 

Here is how the last statement could be a lie:

Money Transfers Will Be Lightning Fast and Convenient: With the help of virtual payment address (VPA) which constitutes of a username for a user’s  bank account, the time taken for money transfer setup has reduced in UPI and most importantly the recipient's IFSC code will no longer will be necessary to know as long as you have their username. Registering the payee’s account with your bank will no longer exist. Since this is a 24/7 process public holidays will have no impact on the money transfers. This allows startups to function much faster when transactions take such little time, especially e-commerce websites.

Payments Can be Tracked in a Jiffy: Individuals and startup businesses are allowed to create payment requests on UPI to people with the “Ask” request. Payers get a notification and will only have to accept this payment request for completion of the transfer. Not a new concept, because it eist is both NEFT and RTGS, but this request is easier to create and more accessible on UPI.

Quick transactions: The steps for money transfers on UPI are far lesser as compared to other options and can even function a slow 2G network, on the phone. This again is beneficial for startups because they can now allow consumers to make payments through UPI without having to worry about a 3G or a 4G network. 29 banks are in the UPI system while other banks are joining in or preparing to.

No more broken transactions: Studies have shown that cart abandonment on e-commerce sites where people give up just because their money transfer is not taken place has costed the industry over $10 billion which gives startups on the ecommerce platform a higher chance to save more money.

Trustworthier e-commerce practice: We think twice when we buy something from the most e-commerce website today despite the fact that the security is so high. UPI’s higher security measures ensure that people with startups which are lesser known can use the UPI as a trustable platform for money transfer adding more faith and brand value to their business. Cash on Delivery costs more to the company due to the uncertainty of the payment. Hence, with a platform that people trust more the loss through cash on delivery process is expected to reduce drastically.

Startups can definitely make the best use of the UPI infrastructure to enhance not only the not only the customer experience, facilitating“less cash” economy and being able to achieve larger financial goals.