The methods of making payments and banking have also evolved with changing trends. Do you recall when cash was the main form of payment? Numerous problems existed with it, such as as theft, a lack of change, and the absence of ATMs. UPI is a new technology that we have to fix all of this. Although UPI is a very safe and practical way to make payments, have you ever noticed that using it alone is increasing your spending? Let's investigate.
SUCCESS STORY OF UPI IN INDIA
1. Origination and Vision:
The National Payments Corporation of India (NPCI) was responsible for the design and development of UPI.
👉The RBI and large banks, in conjunction with Nandan Nilekani's visionary leadership, revolutionised digital payments in India.
👉The creation of a seamless, safe, and effective payment system that would meet the various needs of Indian customers was the aim of UPI.
2. Widespread Adoption:
👉After its April 2016 launch, UPI quickly became very well-known.
👉With more than 200 million registered users and processing over 2 billion transactions monthly, UPI is a growing service.
👉It has completely changed how people transact, opening the door for a cashless society.
3. Innovative Features:
👉Simplified Transactions: Using UPI, users may send and receive money on their favourite app with just a click or swipe.
👉UPI ID: Users can use a UPI ID to make transactions simple and avoid typing IFSC codes and bank account numbers.
👉Interaction with BBS: UPI is a cutting-edge platform because of its interaction with the Bharat Bill Payment System (BBPS), which allows for regular bill payments.
4. Inclusivity and Reach:
👉There is no app-specific UPI. It's rise is fueled by popular UPI apps like PhonePe, Paytm, and Google Pay.
👉For widespread use, the user interface and experience have been improved.
👉UPI has an impact on a wide range of social groups, including tea merchants and upscale stores.
5. Current Situation:
👉UPI transactions are still increasing, and the Covid-19 outbreak hastened the use of digital payments.
👉The UPI network processed 6.28 billion transactions totaling Rs 10.63 trillion in July 2022.
RECENT INNOVATIONS IN UPI
1. Credit Card through UPI:
👉UPI and RuPay Credit Cards are now connected. Through the BHIM app or any other UPI app, users can link their RuPay Credit Cards to a UPI ID.
👉Credit card transactions are streamlined by this integration. After providing their UPI PIN for authentication, users can use UPI QR codes to make payments to businesses.
👉Increased consumption through asset-lite QR code-based credit card acceptance benefits merchants.
2. Cardless Interoperable Withdrawals (ICCW):
👉ICCW customers can use their UPI apps to withdraw cash from ATMs.
👉Users can conduct transactions without a physical debit card by using their smartphone to scan the QR code of the ATM and authorise the transaction with their UPI PIN. For millions of users, this invention improves accessibility, security, and convenience.
3. Overdraft on UPI:
👉Customers can link their overdraft accounts to UPI with UPI 2.0.
👉From these accounts, users can carry out instant transactions and take advantage of all the overdraft advantages.
👉Users may quickly manage and use their overdraft facilities thanks to this integration.
4. Upcoming: UPI 3.0:
👉UPI 3.0 is the next stage of technological advancement.
👉Important characteristics consist of:
International Transactions: Enables users to send and receive money anywhere in the world by facilitating cross-border payments using the UPI platform.
HAS UPI INCREASED SPENDING IN INDIA
1. Increased Transaction Volume:
👉The National Payments Corporation of India (NPCI) claims an abrupt rise in UPI transactions.
👉The quantity of transactions made through UPI in April 2024 increased by 50% from the previous year to 1,330 crore, or almost 13.3 billion.
👉With 48.6 billion real-time payment transactions performed in 2021, India took the lead worldwide.
2. Consumer Behaviour and Overspending:
👉More frequent payments, particularly low-value transactions, have resulted from the convenience of UPI transactions.
👉Although this ease is helpful, some people have overspent as a result of it.
👉Because using UPI is so easy, people tend to buy things on impulse or do transactions more frequently.
3. Study of Credit Card Spending:
👉The spike in UPI has also affected the utilisation of credit cards.
👉From INR 9.83 trillion in April 2022 to INR 10.73 trillion in August 2022, transactions through UPI grew.
👉During the exact same time frame, credit card spending via Point of Sale (PoS) terminals rose as well.
4. Overall Impact:
Due to UPI's popularity, both individuals and companies now prefer to use it as a form of payment, aiding in India's digital transformation. Although it encourages ease and financial inclusion, users must watch out for overspending.
HOW TO CONTROL OVERSPENDING ON UPI
1. Determine how much you can afford to spend each month in order to create a budget.
👉Create a budget with predetermined spending caps for every area (such as groceries, entertainment, and bills).
👉Stick with your financial strategy.
2. Monitor Your Expenses:
👉Use a money management application to monitor your spending.
👉Regularly review your transactions to see where your money is going. Find out which places you usually spend too much.
3. Limit the Number of UPI applications:
Although UPI applications are convenient, using too many of them might lead to overspending.
👉Consider using one or two reliable applications for your transactions.
👉Get rid of seldom used apps to reduce temptation.
4. Steer clear of Impulse Purchases:
👉Consider your needs before making a buy.
👉Steer clear of impulsive purchases just because they seem easy and quick to complete.
5. Set Transaction limitations:
You may set daily or monthly transaction limitations with a lot of UPI apps.
👉Set these limitations according to your financial objectives and budget.
👉Once you've spent it all, don't buy anything more until the following cycle.
6. Connect UPI to Particular Accounts:
👉Set aside that money for necessities.
👉Maintain different accounts for investments or savings.
7. Become Financially Literate:
👉Acquire knowledge about budgeting, saving, and personal finance.
👉Recognise how excessive spending affects your ability to manage your finances.
👉Read books or go to workshops on money management.
HOW CAN I SET TRANSACTION LIMITS ON UPI APPS?
1. Google Pay:
Using Google Pay, you may transfer up to ₹100,000 INR through any UPI app in a single day.
👉You may be limited in how much you can send or receive by your bank, however.
👉These procedures can be followed to set customised transaction limits:
Get the Google Pay app open.
Navigate to the profile or settings section.
Search for the UPI settings or transaction limit option.
You can change the limitations to suit your tastes.
2. Indian State Bank (SBI):
- You have the ability to modify your UPI transaction limit if you are an SBI customer.
- Launch the SBI internet banking app.
- Enter your login information to log in.
- Find the "UPI Transfer" option on the top menu.
- To change the limit, select "Set UPI Transaction Limit"
3. Union Bank of India:
👉For clients of Union Bank who use BHIM UPI:
- Get the BHIM UPI app open.
- From the home screen, select "Manage".
- To adjust your transaction limitations, select "Set Transfer Limit"
4. Other UPI Apps:
- The settings or profile sections of the majority of UPI apps offer comparable features.
- Search for phrases such as "transfer limits," "UPI settings," or "transaction limits."
- Adapt the limitations to your preferences and financial demands.
APPS TO CONTROL OVERSPENDING
1. Axio Expense Tracker:
With millions of users and excellent reviews, Axio is a highly recommended tool.
It lets you use BHIM UPI to send money transfers and tracks your spending through SMS.
2. PocketGuard:
For those who overspend, PocketGuard is a great tool.
Its functions are centred on assisting users in reining in excessive expenditure.
There is a paid, premium version of the programme called PocketGuard Plus in addition to the free one.
To get started, connect your credit card, savings, and checking accounts1.
3. Alternative Apps for Budgeting:
Examine apps such as MoneyMint, Walnut, and Money Lover. To help you understand your spending trends, these apps include budgeting options, intuitive UI, and informative reports.
Tags:
Money Management
