How UPI Has Changed The Payment System In India? What Are The Benefits Of UPI?
Hey, folks! as you all know that since the digital India movement has begun there are many things that have come up as a big change, and out of many the one and the main thing brought by the Indian government to support digital payments is UPI. Since UPI has come up it has changed the payment culture in India and now people often make online payments that are a plus point for both buyers and sellers, as now there is no need to be worried about changes also, with the help of UPI you can make payments online to anyone, in any corner of the nation.
Unified Payments Interface (UPI) has revolutionized the way we transfer money in India. It is a real-time payment system that allows instant transfer of funds between two bank accounts through a mobile phone. Launched in 2016, UPI has made it easier and faster for people to send and receive money, pay bills, and even shop online. In this article, we will discuss how UPI has brought a change and whether small payments through UPI affect your banking score.
How UPI Has Changed The Payment System?
One of the biggest advantages of UPI is its convenience and accessibility. Unlike traditional banking methods, you don’t need to visit a bank branch or an ATM to transfer money. All you need is a mobile phone and a UPI-enabled app. You can send money to anyone, anytime, and anywhere in India, 24/7. UPI has made it possible to transfer money even on holidays and weekends, which was not possible before. This has made life easier for people who need to transfer money urgently or frequently.
Cost-Effective
UPI is a cost-effective way to transfer money. Most UPI-enabled apps do not charge any transaction fees for sending or receiving money. This means that you can transfer any amount of money without worrying about transaction charges. This has made UPI a popular choice among small businesses, freelancers, and people who make frequent small transactions.
Security
UPI is a secure way to transfer money. It uses two-factor authentication, which means that you need to enter your UPI PIN and the mobile number registered with your bank to initiate a transaction. UPI also uses advanced encryption technology to ensure that your transaction details are safe and secure. This has made UPI a preferred choice over other payment methods like cash and cheque, which can be lost or stolen.
Impact on Banking Score
Now, let’s come to the question of whether small payments through UPI affect your banking score. The answer is no. UPI transactions, whether small or large, do not impact your banking score directly. Your banking score, also known as a credit score, is calculated based on your credit history, which includes your repayment history, credit utilization, and credit inquiries. UPI transactions do not fall under any of these categories and therefore do not affect your banking score.
However, there is a catch. If you use UPI to transfer money to someone who has defaulted on a loan or has a poor credit history, it could indirectly affect your banking score. Banks and financial institutions use various parameters to assess your creditworthiness, and one of them is your association with defaulters. If you transfer money to someone who has a poor credit history, it could raise a red flag and affect your chances of getting a loan or a credit card.
UPI has brought a significant change in the way we transfer money in India. It has made it faster, easier, and more cost-effective to send and receive money. UPI is also a secure way to transfer money, which has made it a preferred choice among people. While UPI transactions do not affect your banking score directly, it is essential to be cautious while transferring money to someone with a poor credit history. Overall, UPI has made money transfers more accessible and has benefited millions of people in India. Stay tuned with us to get more updates on such topics.
