UPI Payments for Small Business in India: Top 8 UPI Apps

UPI – Unified Payments Interface

The innovations in the Fintech industry has introduced UPI, launched by the NPCI (National Payments Corporation of India).

upi payments

UPI allows a person with a bank account to pay and collect online funds. They require only a smartphone and their unique UPI ID. They need not have any extra information to enter, such as bank details.

As per the statistics available for the UPI product at NPCI UPI Product Statistics, UPI Payments have surpassed the transaction mark of 2-billion in October 2020 itself.

It has gone up by around 80 % from 1,218.77 million transactions in November 2019 to 2,210.23 million transactions last month.

Demonetization led to the need and resultant innovations in various fintech products and services. COVID 19 surged the adoption of digital payments including various UPI and its PSPs. The merchants are adopting digital ways of doing business, the most preferred payment method, in general, is UPI.

Uses of UPI

UPI payments can be done with the help of the UPI apps for the below-mentioned purposes and places:

  • Peer to Peer
  • Bill payments
  • Kirana stores
  • Online shopping
  • Recharge
  • Travel bookings
  • Entertainment
  • Fuel stations
  • Railway tickets
  • Transportations
  • Restaurants
  • Hotels
  • Airports, etc.

UPI and Merchants

The rising promotions emphasizing the use of digital payments in India has resulted in the growth of customer transactions through UPI.

It is also easy for the merchants to collect the payments using this payment method as it enables the collection of instant payments with the minimum or no additional physical tools.

UPI payments can be collected at any time 24*7, even on the bank or public holidays. This would be very beneficial for any seller or service provider.

UPI infrastructure enables immediate payment acceptance directly in the recipient’s bank account after the customer confirms the payment.

About the payment limit, there is no limit from the merchant side for accepting the UPI payments. However, the payer has the upper limit per UPI transaction of ₹ 1 Lakh. The limit in the number of transactions is 20 per day. (it may vary as per the limit provided by the issuing bank)

The merchants/business can accept UPI Payments from their customers easily.

Summary of Benefits of UPI payment collection for the merchants

  • A smooth collection of payments
  • Can collect payments from customers without debit or credit cards
  • Unlike card details, the merchant can save the customers UPI Id with no risk
  • Instant funds collection
  • Fully secured for customers due to 2-factor authentication
  • Single click payment
  • Various options to the customers for PSP (payment service providers)
  • Appropriate for eCommerce and m-commerce

The online, as well as offline merchants, can use the QR Codes at their locations, website, or app to enable the retail transactions initiated and authenticated by the customers. They can also accept UPI apps payments through the UPI ID (VPA: Virtual Payment Address).

The merchant has to partner with the Acquirer bank or a UPI solution provider providing the UPI system to the merchant to enable UPI for his business.

Top UPI APPS

The merchants can choose the best suitable app from the various available options of UPI based apps. The different PSP apps may have additional features, however, the basic functioning would remain the same.

The National Payments Corporation of India (NPCI) has released the statistics for each UPI App providing the UPI payments services including all the PSPs and banks in terms of volume and value.

UPI APPTransaction Volume (Mn)(Nov’20)
Google Pay960.02
PhonePe868.4
Paytm Payments Bank260.09
AmazonPay37.15
BHIM23.56
Yes Bank Apps18.93
ICICI Bank Apps12.71
Axis Bank Apps5.06

The total share of these two UPI apps, Google Pay and PhonePe, was collectively at 82% percent of the Unified Payments Interface (UPI) market.

The transaction volume of the newly launched UPI PSP Whatsapp Pay was at 0.31 Mn in November 2020.  It had started offering the UPI services on a trial basis in early 2018 in India.

To curb the possible risk of Monopoly, NPCI has put a limit on the number of who can use the payments feature to 20 million registration base on Whastapp during the primary phase.

Recently as per the new rule for the third party apps, out of the total volume on the UPI network, Whatsapp Pay can carry out up to 30%.

Parting Notes-

  • NPCI has introduced the UPI AutoPay – a feature to facilitate recurring payments for mobile bills, electricity bills, EMI payments, entertainment/OTT subscriptions, insurance, mutual funds, etc.
  • As per the merchants’ demand, the below features are expected to be added along with the UPI payments.
  • They expect to remove the transaction limit on the customer side
  • They could pay the taxes in a secure and organized manner
  • UPI is one of the most important and payment options in trend currently. However, business merchants should not neglect other methods like Cards, Netbanking, Wallets, etc.

With the PayKun payment gateway, you can easily provide the payment options as under:

  • Debit/Credit cards, Master Card, Visa, Diners Club, AMEX
  • 80+ Net Banking
  • Wallets – Paytm, Mobikwik, JIO Money, Freecharge, Ola money, Phonepe
  • UPI/BHIM (Bhim, Paytm, Phonepe, Whatsapp, Google pay and Others)
  • Single QR Code (Bhim, Paytm, Phonepe, Whatsapp, Google pay)
  • Online and offline businesses can collect online payments with various UPI options as well as other payment methods by sending the PayKun payment links.

The individual features of each UPI App can be studied individually by the merchants and considering the preferred application by the customer, the relevant app can be targeted.

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