India is at the forefront of the digital transaction revolution by paving the path for real-time payments infrastructure using UPI as its flagship product.
UPI payments continue to break all records as it records the most significant year-on-year growth of 74.1% in transaction volume as of January 2023. Reaching 7.8 Billion transactions in December 2022 compared to 2.2. Billion in December 2020.
As more and more people are expected to adopt UPI, this rate is expected to increase even further, driving more sales for e-commerce using UPI and enhancing how you interact with the world through the app.
What is UPI?
UPI is a revolutionary instant fund transfer system which allows for real-time transfer of money from person to person or person to merchant. This has made it extremely simple and accessible for a vast majority of Indians to make payments without having to go through traditional banking options like IMPS, NEFT, and RTGS, which take more time and are more complicated.
How to transfer money through UPI?
Using UPI for payment is easy. You need to link your Bank account to your preferred UPI app. You can search for the person you want to send the amount to using their phone number or scan a QR code. Then you need to input the amount you wish to transfer to them and enter the pin to confirm the payment.
Use of UPI in E-Commerce
This is expected to propel India’s e-commerce market to $150 Billion in 2026 from $83 Billion in 2022. This projection comes as cash transactions continue to decline even further.
The seamless integration of UPI into popular e-commerce platforms has made it easy for customers to make quick and hassle-free payments, contributing to its widespread adoption.
Trends in UPI payments in 2023:
1. Pay Later:
UPI Pay Later is one of those trends that can be seen as the most anticipated and significant in the future. This feature is a buy now pay later scheme made available along with UPI so that customers can make their purchases today and defer their payments later. This feature gives customers more financial freedom, driving higher sales for online merchants.
The growth of BNPL payments is expected at a CAGR of 28.9% during 2021-28. To leverage this rise of BNPL, 65% of merchants have added BNPL as a payment option in the last year.
2. Online order and in-store pickup
With technology being made even more accessible, many sellers have started allowing buyers to place an order online and pick up the items from nearby brand outlets as they keep the order ready for you to take away with you.
3. Building super apps
These digital payment apps have sowed the seeds to become deeply ingrained into the Indian ecosystem by trying to become a super app allowing users to do anything from booking tickets to making utility bill payments to paying each other to buy things on their online malls, request a personal loan, or to recharge their prepaid sim.
Advanced payment apps like Bajaj Finserv, Paytm, and Tata Neu represent a closed ecosystem of many apps consumers use daily.
In recent years, the Indian e-commerce landscape has witnessed a significant transformation with the rapid adoption of UPI as a preferred payment method. UPI has thus emerged as a game-changer in the Indian e-commerce industry, providing a seamless and secure payment experience for consumers and businesses alike.
Whether you are a business or an individual, you should adopt the UPI payment gateway into your payment system and use all of the benefits that come with it with apps like Bajaj Finserv, Paytm, PhonePe, etc.