India has demonstrated the power of digital payment. National Payments Corporation of India has played a significant role in enabling citizens with digital payments, with a mandate for enhancing retail electronic payments. UPI transactions reached Rs. 24 trillion with a volume of about 18 billion in the month of July 2025. The Unified Payment Interface (UPI) has provided convenience for digital payment transactions, along with meeting the diffusion of innovation factors for relative advantage, compatibility, simplicity, observability, and trialability.
The network effect has contributed to rapid innovation and acceptance. UPI is an example of turning a bold experiment with consideration of real-time and interoperable into a global case study. In recent times, many countries and global players are taking a keen interest in shaping the payment market.
This has helped India to showcase the intersection of technology and payments, with a benefit to a large section of the population. NPCI has arsenal of products such as Rupay Debit Card, Rupay Credit Card, Bharat Interface for Money (BHIM), National Automated Clearing House (NACH), Immediate Payment interface (IMPS), National Electronic Toll Collection -Fast tag, *99#, Cheque Truncation System, Aadhar Enabled Payment Services (AePS), Electronic - Know Your Customer services (e-KYC services), Bhim Aadhar Pay, e-Rupi, UPI autopay, Credit Card on UPI, IPO, UPI 123 Pay, UPI Circle, UPI-ATM, UPI-Global, Hello UPI, Initial Public Offering (IPO), User Onboarding on UPI, Third Party Risk Management, On boarding, Off boarding, Transaction, and Facilitation.
Among these products, UPI stands out, and now UPI has come up with interesting product variants. A successful product takes into consideration the essential criteria of innovation, with the consideration of offering convenience on a real-time basis, making it interoperable, and democratizing digital payment.
While some products from NPCI are for a larger population, some cater to specific markets and customers. For example, Aadhar Enable Payment Services focuses on digital transfer related to Financial Inclusion, farmers (PM-Kisan Samman Nidhi). IPO (a product from NPCI) is meant for investors subscribing to the initial public offering. *99# considers the application of unstructured supplementary service data (USSD) for all GSM handsets (smartphone or otherwise). We find that two products are combined by NPCI to bring the benefits of both. For example, UPI ATM allows cash withdrawals and cash deposits at an ATM using a unified payment interface.
There is a case for “reverse process innovation,” which is based on bringing simplicity, integrating, and democratizing financial services using the power of digital. Products enter the product life cycle and evolve over a period of time. For example, it started with Interbank mobile payment services, to an immediate payment service to using the power of UPI to make it frictionless. There is evidence of competition of products within NPCI. This is like letting your product move to the decline stage by bringing a new product at a suitable time.
Rather than competitors killing the product, you decide the fate of the product. For example, different versions of UPI diminish the power of cheque-related products with the reduction in cheque transactions. Products are developed based on development in other systems. For example, UPI is successful because of the system of the Unique Identification Authority of India, leveraging Aadhaar in place. The mapping of bank accounts and phone numbers makes the transfer intuitive and easy for customers. Products from National Payment Corporation of India have fostered a vibrant fintech ecosystem.
The developments at NPCI have important lessons for product managers in terms of keeping an eye on product life cycle as in the case of evolution from interbank mobile payment services to immediate payment services to invisible payment services; aligning with key stakeholders- Unique Identification Authority of India (UIDAI), government, and various ministries in government; keeping an eye of target customers (e.g. AePS for financial inclusion, LPG subsidy, PM Kisan Samman Nidhi) and shedding myopic view of protecting own product at the cost of company’s development.
The products cannot be static, considering the developments. For example, variants of UPI, such as credit line from UPI, *99# can enable the product to reach to newer target segment which could not be covered by mainstream products.
Also Read: New UPI Rules Effective August 1: All You Need to Know
The rapid adoption of digital payments is spurred by internet connectivity, smartphone penetration, support from UIDAI, and an enabling atmosphere supported by the Government. There are major factors that have resulted in widespread adoption. The first factor is easier identification of receipts using QR codes, tap and pay facility, and leveraging voice commands. Today, Dynamic QR codes can be linked with an invoice and a particular SKU, enabling better and faster reconciliation. Second. the development of Near Field communication (NFC) and wearable integration enhances payment convenience. Third, the adoption of voice command in daily life is extended to an interesting product of Hello UPI. The strength of the payment infrastructure lies in managing the transaction and settlement cycle. Automated reconciliation platforms with the use of technology for risk management, such as anomaly detection, are crucial. API integration between payment platforms and software can enable faster ledger entries and better reconciliation.
The journey of digital payments is resulting in enhanced convenience and seamless integration. The interesting part of the story of adoption in the rural hinterland. However, there are concerns about threats emerging from cybersecurity. The instances of fraud attempts are on the rise, and fraud can result in customer vulnerability. There are concerns of low bandwidth or bank outages, due to which digital transactions do not occur.
Some cases of unfair practices warrant attention. For example, some online retailers transfer money into a retailer-owned prepaid account during product returns, thus not allowing transfers to their customers' bank accounts. In this regard, the role of policy, telecom partners, the digital ecosystem, the Government, and law enforcement agencies is crucial. The future will look into how Indians transact by aligning with the Reserve Bank of India's Payment Vision 2025 of safe, secure, reliable, accessible, affordable, and efficient payment systems.
Authored By
Dr. Dhananjay Bapat is an Associate Professor at the Indian Institute of Management (IIM) Raipur. He holds a PhD in Marketing from Sardar Patel University, Vallabh Vidyanagar, Gujarat, and has previously worked with the National Institute of Bank Management (NIBM), Pune; GCMMF (AMUL); and Crompton Greaves. Dr. Bapat’s research expertise spans digital banking, financial services marketing, brand management, services marketing, digital payments, consumer behavior, branding, and banking. He has led executive training programs for both national and international participants, focusing on financial services marketing, retail electronic products, and strategic planning for financial services. His consultancy project “Cost of Cash” earned widespread appreciation from policymakers, practitioners, and academics. He has authored the book Marketing for Financial Services and published extensively in reputed academic journals.
