The Unified Payment Interface has seen a spectacular transformation that has completely changed the world of digital payments. This homegrown invention has been crucial in the shift from a cash-based economy to a technologically advanced one.
Since its initial launch in 2016, UPI has been instrumental in establishing India as a pioneer in the field of next-generation real-time payments infrastructure. Small retail businesses and taxis have point-of-sale (POS) terminals in developed nations. But a few years ago, many businesses in India lacked any payment infrastructure. In this context, the Unified Payments Interface (UPI) emerged as a key participant and completely altered the nation’s payment environment.
Contactless payment and their role in the retail sector
A payment method known as “contactless payment” enables consumers to make purchases by simply tapping or waving their contactless-enabled cards, cellphones, or wearable gadgets close to a terminal that accepts them. Retailers now find it easier to conduct business, and financial inclusion, as well as commercial and economic progress, have been made possible by the spread of digital payments in India and the availability of numerous straightforward and practical digital payment alternatives. Because of contactless digital payment systems like BHIM-UPI, it was possible to maintain business operations during the pandemic, especially for small merchants.
- A greater range of shops now accept contactless payments due to the rise in smartphone usage and the rapid advancement of mobile payment technologies. Numerous UPI apps, including Apple Pay and Google Pay, offer contactless features, giving users a comfortable and straightforward platform. One of the primary factors pushing the adoption of contactless payments by shops is the simplicity of mobile phone use and the applications created for contactless payments.
- Today’s offline merchants must have a digital payment system because more and more of their customers are making purchases online. Contactless payments can also be made with a PoS terminal, which is essential in the post-pandemic world. Additionally, it shortens customer wait times and makes transactions simpler.
- Digital payment solutions like PoS terminals are useful for operational tasks like inventory management, GST compliance, and tracking receivables and payables. They may readily provide extensive insights by offering a sense of various payment processes. Through the use of an electronic payment system, the payments and associated operations are efficiently managed without the use of additional software.
- Handling, counting, and depositing cash transactions are necessary yet time-consuming and prone to error. By accepting contactless payments, small merchants have decreased the need for cash transactions, which has led to lower cash handling costs and better cash flow management. Retailers now have the choice to grow their businesses even more as a result.
- Strong security measures for contactless payments include tokenization and encryption, which lower the possibility of fraudulent transactions. Small merchants profited from this additional degree of security, which protected both their clientele and their business, which served as a compelling reason for them to consider accepting contactless payments as a form of payment.
- Retailers that accept contactless payments through a UPI app can gain a competitive advantage as the practice spreads. Customers expect contactless transactions to be more convenient; therefore, businesses that don’t offer them run the risk of losing customers to rivals.
Indian customers are pushing the adoption of digital payments, which has exploded in India thanks to the fintech industry’s cutting-edge innovations and ground-breaking regulatory reforms.