UPI Revolution Automates Reset Process and Transforms Consumer Trends
Banks utilizing Unified Payment Interface (UPI) functionality have adopted various strategies that improve user accessibility and operational efficiency. These banks have a common problem when user IDs are locked, and a user enters the wrong password three times. To address this problem earlier, the concerned banks approached the National Payments Corporation of India (NPCI) seeking intervention.
To address this, NPCI has automated the reset process with three secure options: provided in response to a security question, with the help of a one-time password (OTP), or with the help of multi-factor authentication (MFA). As per an NPCI circular, this step is expected to bring down the frequency of user ID ‘lockouts’, which account for about 20% of queries received by the corporation.
UPI Transactions Surge to Record Highs
UPI adoption also continues to grow, as evidenced by the increased transaction traffic in the system. According to NPCI data, the total UPI transaction volume rose to 16.73 billion in December 2024, up 8% from 15.28 billion in November 2024. This growth shows that the system is widely embraced and provides ease for merchants and customers.
Due to the efficient payment experience offered through UPI, it has gained great popularity among small businesses and local shopkeepers. Therefore, the flexibility of carrying out payments via electronic channels has led to the advancement of traditional payment methods. Such a transition has also helped to make transactions efficient and transparent, making UPI one of the most important payment rails.
Exact Payments Rising while Candy Sale goes down
With UPI integration, consumers’ spending behavior has significantly changed, especially regarding small changes at local stores. To compensate for the lack of small change, shopkeepers used to give candies in exchange for rupees.
Chartered accountant Harshad Shah observed in a social media post that the exact payment enabled by UPI had slowed the daily candy sale. Industry giants such as Mondelez, Mars, Nestle, Perfetti, Parle, and ITC are said to have reduced their sales as customers now pay accurate amounts without asking for change for 1 Rupee or 50 Rupee notes.
One distinct influence is overwhelming across 13 million kirana stores in India that saw their payments shift drastically with the prevalence of UPI. The change also highlights the need to consider the economic shifts that come with digital payments and how technology disrupts industries and consumer interfaces.
