UPI has revolutionized digital payments in India, quickly becoming the most used method. Launched in 2016, UPI has changed how people transact. This article explores the evolution of UPI, covering key features and updates that have simplified digital transactions for users.
UPI was launched in India by NPCI in 2016, with the goal of linking different banks to facilitate transactions using mobile numbers and UPI IDs, without the need for IFSC codes or account numbers.
The years 2017-18 saw the introduction of the BHIM app and QR codes. The BHIM app made UPI accessible directly to consumers, and merchants adopted QR codes for quick payments via mobile number or scan.
In 2019, UPI AutoPay was introduced to automate recurring payments such as subscriptions, EMIs, and insurance premiums. Users could authorize monthly payments, reducing the need for multiple OTP entries and increasing access to digital services.
The COVID-19 pandemic in 2020 led to a surge in cashless payments, making UPI a common payment option. UPI transactions exceeded 2 billion that year.
In 2021, UPI 123PAY enabled UPI payments without internet access. UPI was linked with countries such as Bhutan, Nepal, and Singapore, extending the reach of UPI, especially to the elderly and rural communities.
In 2022, the RBI enabled UPI payments via RuPay credit cards, increasing payment options beyond bank accounts. This integration helped with larger transactions.
In 2023, AI-based fraud detection systems were added to UPI, enhancing security and control over fraudulent activities, thereby protecting users.
In 2024, UPI Lite and Tap & Pay features were launched. UPI Lite allowed small, PIN-less payments up to ₹500, and NFC technology facilitated Tap & Pay services. These features eliminated the need for QR code scans.
Biometric verification is set to be introduced in 2025, enabling users to pay via face ID or iris scans instead of entering a PIN. NPCI is actively testing this system, which will be rolled out across select banks and apps in the coming months.