The adoption of digital payment methods has increased, especially in tier 2 and 3 cities and rural areas, where the need for digital financial services has risen. The current payment systems, particularly the Unified Payments Interface (UPI) ecosystem in India, have witnessed phenomenal growth in the last few years.
The widespread adoption of UPI has made digital payments acceptable. The numbers revealed by NPCI showcase the rapid expansion of UPI, with over 74 billion transactions worth Rs 125.94 lakh crore processed in the calendar year 2022 alone.
"This highlights the increasing popularity and acceptance of digital payment methods in the country," said Bipin Preet Singh, Cofounder and CEO, MobiKwik, while talking to CNBC-TV18.com.
Rise of financial products
Digital credit and investment products have seen a significant uptake from customers.
"We have witnessed a huge demand for our digital credit products like ZIP, particularly among underserved segments such as those who are new to credit or have limited access to formal credit. Our investment product, Xtra, which offers up to 12 percent returns with no lock-in period on withdrawal, has also been well-received by digitally savvy young Indians," Singh said.
Shift from cash to digital payment
There has been a tectonic shift from cash to digital payment. The pandemic has accelerated this transition, with more people embracing digital financial services for their convenience, accessibility, and safety.
Singh said he has observed increased adoption of services, especially in tier 2 cities.
"MobiKwik’s users are distributed across 99 percent of Indian PIN codes, which means that we are reaching communities that have traditionally been excluded from the formal banking system," he added.
In another development, MobiKwik launched Wallet UPI. This feature will allow MobiKwik users to make one-click UPI payments without the need for any PIN, MobiKwik said. This feature works even when the user's bank server is down, enabling them to complete transactions with ease, the banking platform said.
Recent NPCI guidelines have enabled wallets to be interoperable on the UPI rail, treating them like bank accounts. Several lenders across the country have also linked their Rupay credit card to UPI. This move is expected to simplify customers’ utilisation of credit by leveraging the flexibility that UPI has to offer.
