The Unified Payments Interface (UPI), which was launched in 2016, has transformed financial access in the country. According to a study titled Open Banking and Digital Payments: Implications for Credit Access, UPI has enabled nearly three hundred million individuals and around fifty million merchants to perform seamless digital transactions.
As per the study, seventy-five percent of all digital retail payments in India were done through UPI by October last year. It has also enabled underserved groups, including subprime and new-to-credit borrowers, to access formal credit for the first time. The study noted that the affordability of digital technology played a critical role, enabling widespread UPI adoption in rural and urban areas alike. The study added that despite the credit surge, default rates did not rise, showing that UPI-enabled digital transaction data helped lenders expand responsibly
