UPI has been in the news and for the right reasons. India has shown a remarkable transformation in the way it has enabled money to move with the Unified Payments Interface. Take the cash-dominated transactions or a thriving digital ecosystem, the change seen in the payment’s ecosystem has been swift and profound.
One evolution that lies at heart of this change and has become the default method of payment for millions of Indians is UPI. The success of digital payments is by no means an accident. Speed, near-zero cost, and strong security have given consumers and small merchants the reason to embrace it wholeheartedly. In many ways, UPI has democratised access to digital payments by bridging the gap between urban and rural economies.
But even while consumers find UPI simple and intuitive, with number of users growing, it is the business community that faces a more complex truth. Accepting digital payments is no longer optional for a business entity. It is more about it being integral to survival in a rapidly digitising economy. The challenge for businesses is not just about enabling UPI as that can be done, but it is about doing so in a way that works seamless, is customer-friendly, and compliant with an ever-evolving regulatory framework.
UPI this presents itself as both an opportunity and a responsibility. If India’s payment platform is to continue its upward trajectory, businesses must recognise that digital trust is the new currency. Every failed transaction, every cumbersome checkout process, and every compliance lapse breaks away from that trust.
The Compliance Imperative
The first and perhaps most urgent issue is compliance. The Reserve Bank of India and the National Payments Corporation of India (NPCI) have mandated strict requirements for businesses that wish to accept UPI payments. These include mandatory Know Your Customer (KYC) verification, proper business account linkage, adherence to merchant discount rate (MDR) thresholds, and the adoption of interoperable QR codes.
While on the surface, these requirements may appear cumbersome and as a burden, particularly for small and medium-sized enterprises, compliance should never be seen as a hurdle. It is really a safeguard. Aligning with compliance ushers in a standard that protects businesses from legal risks, builds consumer confidence, and ensures that the payments ecosystem remains robust and trustworthy. Policymakers can consider simpler processes for micro and small businesses, but adherence must remain non-negotiable.
The Experience Gap
The second issue lies in customer experience. Payment journeys are often designed keeping technology in mind rather than the end user experience. Customers attempting to pay should not have to wrestle with multiple redirections, failed authentications, or confusing prompts. A friction at the point of checkout is more than an inconvenience, it makes for a lost sale. Businesses must understand this as studies consistently point out that digital cart abandonment is a major cause of revenue leakage.
Preparing for the Next Wave
Although it has already transformed how millions transact India’s digital payments story is still unfolding. With UPI at its core the next wave of innovation is fast approaching. Tools like UPI AutoPay, Tap & Pay using near-field communication (NFC), and credit-on-UPI are being tested to offer new opportunities for both businesses and consumers. For instance, AutoPay can revolutionise recurring payments and simplify a host of transactions like utility bill payments and insurance premiums. Tap & Pay offers convenience to physical point-of-sale transactions, while UPI-linked credit could make short-term lending more accessible to individuals and micro-enterprises.
It is essential that Indian businesses remain forward-looking and begin integrating these tools now and not after they have become an industry standard. Early adoption will pave the way to ensuring competitiveness, differentiation, and alignment with evolving consumer expectations. The rich data these digital transactions generate is another under-leveraged advantage. Each transaction is a valuable insight into customer preferences. It reveals what they buy, when they buy, and how they pay. Businesses can use this intelligence to refine marketing strategies; tailor offers and improve customer engagement.
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For instance, a strong preference for UPI payments could inform targeted incentives, while patterns in international digital payments might guide improvements in cross-border transaction processes. This power must however be balanced with responsibility. Businesses must invest in secure data management and remain compliant with data protection and privacy laws to maintain customer trust. The ultimate success in the digital payment’s ecosystem always hinges on three pillars: trust, compliance, and adaptability. Only seamless experiences can build trust, while compliance ensures sustainability and adaptability while driving innovation. It is only by embracing these principles today that India’s digital economy will go on to shaping a bright future on the global stage.
By :- Mr. Rakesh Raghuvanshi, Founder & CEO- Sekel Tech
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