What is the most likely outcome of implementing the ‘Unified Payments Interface (UPI)’?

Correct option is D

The correct answer is (d) Mobile wallets will not be necessary for online payments.
Explanation:
· The Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India (NPCI). It facilitates the instant transfer of money between bank accounts via a mobile device, eliminating the need for traditional mobile wallets.
· With UPI, users can link multiple bank accounts to a single mobile application and transfer money instantly using a UPI ID, without the need for a digital wallet to store funds.
Important Key Points:
· UPI has revolutionized the payment landscape in India by providing a seamless and efficient way to make transactions directly from bank accounts.
· The adoption of UPI has significantly reduced the dependence on mobile wallets, which require users to load money into a separate account before making payments.
· UPI's interoperability allows transactions across different banks and payment apps, making it more versatile than mobile wallets, which are often limited to specific platforms.
· The government’s push for a cashless economy and digital payments, particularly after the demonetization of 2016, has accelerated the adoption of UPI.
· UPI supports a wide range of transactions, including peer-to-peer transfers, bill payments, and purchases from merchants, making it a comprehensive payment solution.
· UPI has also contributed to financial inclusion by enabling easy access to digital payments for a large segment of the population, including those in rural areas.
Knowledge Booster:
· FDI inflows: UPI's introduction primarily focuses on domestic digital transactions and does not directly impact Foreign Direct Investment (FDI) inflows.
· Direct transfer of subsidies: UPI can facilitate direct benefit transfers, but it is not the only or primary means for subsidy distribution.
· Digital currency: While UPI promotes digital transactions, it does not replace physical currency entirely; instead, it complements the existing financial ecosystem.