FINANCIAL INCLUSION THROUGH UPI IN INDIAN FINANCIAL SECTOR

Abstract

The growth of technology advancements has accelerated the shift of money into digital form, since an increasing number of people choose digital cash payment methods over physical currency. This move has made it easier for bank customers to obtain a variety of financial services and benefits. The introduction of the Unified Payments Interface (UPI) in 2016 served as the spark for this transformation. The introduction of UPI has spurred people to discover and use a variety of previously underutilised financial services. This study will look at UPI's different role in increasing financial inclusion in India, as well as its deep impact on diverse stakeholders such as the unbanked people, small companies, and rural areas. The introduction of UPI signifies a big step forward in India's journey to financial inclusion, as it removes key hurdles to accessing formal financial services. UPI has enabled millions of people, particularly those in underserved areas, to join in the formal financial system thanks to its user-friendly interface, interoperability among banks and payment service providers, and cheap transaction costs. Looking ahead, UPI's possibilities for boosting financial inclusion remain positive, based on collaborative initiatives, awareness campaigns, and technology advances. Collaboration among government agencies, financial institutions, fintech companies, and other stakeholders is critical to ensuring the continuing expansion and adoption of UPI throughout various segments of society. Furthermore, promoting knowledge of UPI's benefits and functions, particularly among marginalised areas, can help bridge the digital divide and empower more people to use digital financial services.