This paper studies Unified
Payment Interface (UPI), a new age payment system introduced in India by
National Payment Corporation of India. Unified Payment Interface is a mobile
centric, real time interbank payment system which has the potential to
transform and universalize digital payments in India. The paper traces the
evolution of payments systems in India and examines in detail the technology
behind Unified Payment Interface focusing on its architecture and security
systems through empirical and theoretical literature review. UPI is a
significant advancement as compared to extant payment system in terms of cost,
ease of use for consumers, settlement times and security and has witnessed good
user adoption. Its modular API based architecture will enable development of innovative
solutions for consumers and businesses. UPI is currently in its infancy stage
and development of merchant centric UPI solutions will greatly increase the
user adoption. UPI can help bring a large part of the population within the
ambit of digital economy and can be a great tool for financial inclusion in
India.
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