NEW DELHI: The rise in UPI payments has helped reduce use of cash in India, a new paper by a team from IMF has said, while using proxies, such as cash withdrawal from ATMs and currency in circulation as a proportion of GDP.“Since its launch in 2016, UPI has grown quickly, while some proxies for cash usage have begun to decline. UPI now processes more than 18 billion transactions per month and dominates other electronic retail payments in India. India now makes faster payments than any other country,” it said. The paper has strongly backed interoperable payment systems, such as UPI, arguing that these systems allow seamless payments between users of different payment providers.The ecosystem has now grown to reach over 600 banks and 200 apps. When UPI was launched, initially more than half the users flocked to their banks and accessed it through their bank apps as they trusted these entities. But, the paper said, over time, they moved to apps, possibly due to better quality, benefitting from the freedom to switch apps provided by interoperability.Now, these apps dominates the space and among banks, the share of those choosing their banks is higher in case of private players than the public sector entities.
