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Q. UPI role in digital empowerment: How Unified Payment Interface will helps in digital empowerment in India.
Aug 27, 2016 Related to : GS Paper-3

Ans :


Unified Payment Interface is a payment system that allows money transfer between any two bank accounts by using a smart-phone. It allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC code, or net banking/wallet passwords. Recently it has been inaugurated by launching live with 21 banks.

Its role in digital empowerment-

  • As UPI goes live with 21 banks, it is considered as a big step forward in financial inclusion and the use of technology to improve quality of life of the people.
  • As it enables people to transfer money from their accounts instantly, it will bring down the use of cash, simplify merchant payments, lower costs and improve security and transparency.
  • UPI’s open architecture and fully flexible user interface are outstanding. It  enables anyone with a bank account and a phone to transfer money to another bank account without having to know or enter that person’s bank account number or IFSC code. 
  • Several bank accounts can also be linked to the same virtual address. It allows merchandise to be paid for directly from the customer’s account to the merchant’s, without cash and without even a payment card.
  • It brings various banking services at the door steps of even rural people and empowers people in both financial and digit inclusion.


  • Transaction charges hold the key for its wider adoption. Hence, rationalisation of transaction charges that include interchange fees will be useful to popularise UPI as a fund transfer and payment option.
  • Government should ensure proper connectivity to rural areas and also spread digital and financial awareness to people.


As UPI goes live with 21 banks, it will boosts digital banking services in rural areas and empowers people with digital and financial facilities. It is one of the big leap in digital empowerment of India.

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