See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/366028745

Impact of Covid-19 Pandemic on UPI Payment System in India

Article · March 2022

CITATIONS READS

0 300

1 author:

Ashok K. Kokate
Shreemati Nathibai Damodar Thackersey Women's University
3 PUBLICATIONS   0 CITATIONS   

SEE PROFILE

All content following this page was uploaded by Ashok K. Kokate on 06 December 2022.

The user has requested enhancement of the downloaded file.

 ‘RESEARCH JOURNEY’ International E- Research Journal E-ISSN :
Issue - 289 : Commerce and Management in 21 st Century 2348-7143
Peer Reviewed Journal March : 2022

Impactof Covid-19 Pandemicon UPI Payment System in India

Mr. Ashok K. Kokate

Assistant Professor, SNDT Arts and Commerce College for Women, Pune

Abstract:
In India, on 27th January 2020, the first case of covid-19 found in Kerala and after that it spread very fast in
the all over the country. The government of India taken the necessary preventive action to stop the spreading of the
covid-19 and declared the first lockdown on 24th March 2020 for 21 days. Due to fair about the transmission of the
covid-19 virus through the physical mode of payment, the number of people started using the digital payment system
and it resulted in very fast growth in the digital payments. After the demonetization in the year 2016 the government
of India taken the initiative for Digital India and emphasis for cashless and digital transaction. Therefore the Cashless
or Digital transaction is not a new concept in India. In this research paper, the researcher analysed the impact of the
Covid-19 on the digital mode payment with special reference to the UPI (Unified Payment Interface).
Keywords : UPI, Digital Mode of Payment, PSP and NPCI

Introduction:
Unified Payment Interface (UPI) is the retail digital Payment Mechanism which is introduced by the National
Payment Corporation of India (NPCI) in April 2016. UPI uses with the help of smartphone applications and it provides
the fastest platform to make the payment or receive money instantly. Various third party application can also use for
UPI transactions such as Phonepe, Paytm, google pay, amazon pay and Freecharge etc. During the covid-19 pandemic
period, the people are fearful about the spread of the coronavirus through the exchange of currency notes therefore
everyone is tried to make the payment digitally. Even the small vegetable sellers, street sellers and every retailer also
start to accept the payment through the UPI payment from the customer. Because with the help of UPI QR code or BHIM
UPI ID sender easily send the money to the receiver. To make the payment with the help of UPI, the sender’s physical
existence is not required in the shop because it is a virtual payment system and therefore during the covid-19 pandemic
situation number of customer accepted the use of the UPI payment system. Nowadays UPI provides the payment
platform not only business transactions or transfer the money from one account to another but also it provides services
such as payment of electricity bill, D2H recharge, Mobile recharge, general utility bills, and to make investments such
as SIP payment, IPO Subscription payments etc. UPI provides the payment platform 24*7 of the 365 days, therefore,
it is convenient to all users and there are no charges for such transactions. Currently, there are 207 banks and 20 third
party applications live on the UPI which are provide the UPI payment platform to its customers.

Review of Literature:
(PwC, 2020) The report published by pwc on the impact of covid-19 outbreak on digital payments provided the
information about the impact of the covid-19 pandemic situation on various sectors and various payment categories
and it is shown that there is positive impact on the UPI payment system. Due to the fears of coronavirus transmission
through the cash, customers preferred to make the payment digitally.
(KPMG, 2020) The report published by the KPMG in the month of August 2020 on “ Impact of Covid-19 on Digital
Payments in India” from January to June 2020. It is shown that decline in the use of the mode of digital payment due to
lockdown but it has shown quickly recovery in the subsequent months. The analysis of the poll on digital payment also
given in this report and it indicates that even post covid period people adopt the digital mode of the payment system.
(Gochhwal, 2017) in his study on „Unified Payment Interface—An Advancement in Payment Systems‟ stated that
the detail information about the UPI payment system in India and how it will help for the digital financial inclusion.
He has also mentioned the growth of UPI payment transaction and impact of such digital payment for the growth of
the businesses.
(Tungare, 2018) in his research paper he tried to know the awareness about the various digital payment methods
and adoption of the UPI payment system by male and female.
( Baghla, 2018), in his conclusion based on the findings he stated that India will take much time to have complete

1 Website : www.researchjourney.net Email : researchjourney2014@gmail.com

Peer Reviewed Referred & Indexed Journals
 ‘RESEARCH JOURNEY’ International E- Research Journal E-ISSN :
Issue - 289 : Commerce and Management in 21 st Century 2348-7143
Peer Reviewed Journal March : 2022

cashless economy. There are some issues with digital payment systems or fear among the people about the safety and
security of money so the government should take necessary initiatives to boost the digital mode of payment transactions.
(K. & K. , 2018) in their research the researcher examines the effect of adopting digital payments impact on
consumers of the banking sector of India. The results stated that technological development has improved the performance
of digital payment of banking sectors and banking the institution should take efforts for creating awareness about the
use of the technology for digital payments and for security.

Objectives of Study: The following are the objectives of my study on impact of covid-19 pendamic on digital
mode of payment specially the UPI.
• To know about digital mode of payment- UPI
• To analyse the impact of covid-19 pandemic period on digital mode of payment-UPI.
• To understand the impact of covid pandemic situation on UPI payment transactions and their Value.
Methodology: For the present study the researcher collected the data from the secondary sources. The necessary
information has been collected from different scholars and researchers published research work, articles published in
different journals, newspapers, reports published by the Reserve Bank of India and National Payment Corporation India.
Moreover, some important information is also collected from relevant websites.

Use of UPI Payment system in India:

The government of India always emphasis on the cashless, paperless, and e-payments as a part of the „Digital
India‟ programme. After the demonetization in the year 2016, the government of India has been promoting to the people
go for cashless or digital transaction. some studies on the use of digital payment after demonetization shown that the
volume and value of the transaction have increased only for a short period of time and after that, it has declined. But
after the spread of the coronavirus in India and the necessary prevention taken by the government many people search
the easier, fast, contactless, mode of payment and its requirement of the people met by the UPI (Unified Payment
Interface). UPI is the fastest payment mechanism which provides the various facilities to the users such as user can
link their multiple bank account in one mobile UPI application, real-time payment transfer facilities, and hassle-free
procedure using QR code or UPI Id etc. therefore during covid-19 pandemic period large number of people use this
model for making routine payments such as payment at Kirana stores, vegetable bill, general utility bill, electricity
bill and recharges etc.

Growth of Live number of Banks on UPI

Figure 1
Source: https://www.npci.org.in/what-we-do/upi/product-statistics

The above table and graph shown that the yearwise total number of the banks live on the UPI. In the year 2016
only 35 banks was live on the UPI, it increased by 32 in the 2017, 62 in the year 2018, 14 in the year 2019 and 64

2 Website : www.researchjourney.net Email : researchjourney2014@gmail.com

Peer Reviewed Referred & Indexed Journals
 ‘RESEARCH JOURNEY’ International E- Research Journal E-ISSN :
Issue - 289 : Commerce and Management in 21 st Century 2348-7143
Peer Reviewed Journal March : 2022

in the 2020. So the now total number of banks live on UPI are 207. It clearly shown that in the year 2020 during the
lockdown the large number banks offered the UPI payment system to their customer.
Increased in the number of UPI Transaction:

Figure 2
Source: https://www.npci.org.in/what-we-do/upi/product-statistics

In the above table and graph showed the month wise four years, a number of UPI transactions in million are given.
In the year 2017, the total number of the transaction was 426.71 million and it was increased in the year 2018 up to
3708.22. After that, it was increased up to 10787.54 in the year 2019 and the total number of the UPI transaction in the
year 2020 was 18880.89 million. In the first three years, the trend of the number of UPI transactions is slowly growing.
But in the year 2020, months of April it has depicted declined because of the government of India has declared the
lockdown in the country. It is shown that 19.83 per cent volume of the transaction has declined in the months of April
as compared to the month of March 2020. Therefore, there are some limitation on the spending of the consumers during
the lockdown period. But after that, it has taken quick recovery from the next months. There are many reasons for the
quick recovery of the number of transaction done through the UPI such as Government started the unlocking step by
step, the large number of small retailer/ street traders provide the UPI payment system using UPI QR code to receive
the money from the customers, people also fear about the transmission of Covid-19 virus through the currency notes.

3 Website : www.researchjourney.net Email : researchjourney2014@gmail.com

Peer Reviewed Referred & Indexed Journals
 ‘RESEARCH JOURNEY’ International E- Research Journal E-ISSN :
Issue - 289 : Commerce and Management in 21 st Century 2348-7143
Peer Reviewed Journal March : 2022

Source: https://www.npci.org.in/what-we-do/upi/product-statistics

From the year 2017 the value of the transaction done through the UPI payment system has slowly grown. Even
after the declaration of demonetization of Rs. 1000 and Rs. 500 currency notes in 2016 in India, the government has taken
the efforts for promotion of e- transactions, digital payment system and cashless transactions. After the demonetization
in the year 2017 the total amount of transactions through UPI was 56670.10 Cr. and 2018 it was 579712.95 Cr. But
after the spread of the coronavirus in the china, the Indian people has taken the precautions based on the news and
adopted the digital payment system for their retail payment therefore from November 2019 onwards up to the months
of March 2020 the amount of UPI transactions has increased fastly but due to the government precautionary action on
spread of coronavirus in India, the government declared the 21 days lockdown from 23rd March 2020 in all over the
country. Therefore, there are some limitation for the people on their daily spending and it has shown the impact, in the
month of April 2020 the amount of transactions through the UPI payment system has decreased and it was 151140.66
Cr. After that in the subsequent months, it takes the fast recovery of the amount of the UPI transactions because the
government has given some relaxation and the total amount of the transaction in the year 2020 was 3387744.72 Cr. It
has shown the very fast growth in the year 2020 as compared to the previous year.
Conclusion:
This research study examines the impact of the covid 19 on the digital payment in India with special reference
to Unified Payment Interface (UPI) and also analyzed the number of transactions and their value from the year 2017
to 2020. In this paper, the researcher found that the use of the UPI payment after the demonetization in the year 2016
was not grown very fast as compared the number of UPI transactions and their value has increased after the spread of
the coronavirus in India. After the spread of the coronavirus in India every small retailer, street sellers, tea sellers and
vegetable sellers etc. made digital payment platform available to the customer using the UPI QR code and UPI ID and
due to the fear about the spread of the coronavirus through the exchange of the currency notes a large number of the
people adopted this digital payment system. Therefore it is the favorable indication for the go cashless, digital payment
initiative under the “ Digital India” programme of the government of India.
After the covid 19 pandemic situation NPCI (National Payment Corporation of India) and PRICE (People Research
On India’s Consumer Economy has conducted the survey on the use of the digital payment in India it is shown that
the large number of the people are aware about the UPI but there is some awareness required about the various special
features available in the UPI payment an application such as linking of more than one bank account and UPI ID.
Considering the above all information researcher say that covid-19 pandemic creates the history in the digital
payment system specially UPI so it gives the opportunity for the use of the digital payment system for retail payments.

4 Website : www.researchjourney.net Email : researchjourney2014@gmail.com

Peer Reviewed Referred & Indexed Journals
 ‘RESEARCH JOURNEY’ International E- Research Journal E-ISSN :
Issue - 289 : Commerce and Management in 21 st Century 2348-7143
Peer Reviewed Journal March : 2022
References:
Bibliography
1. Baghla, A. (2018). A study on the future of Digital Payments in India. IJRAR- International Journal of Research and Analytical
Reviews.
2. Gochhwal, R. (2017). Unified Payment Interface—An Advancement in Payment System.American Journal of Industrial and Business
Management.
3. K. , S., & K. , H. (2018). A Study on Digital Payments in India with Perspective of Consumer‟s Adoption. International Journal of
Pure and Applied Mathematics.
4. Kavitha, M., & Sampath Kumar, K. (2018). A Study on Digital Payments System with Perspective of Customer’s Adoption. Eurasian
Journal of Analytical Chemistry.
5. KPMG. (2020, August). Retrieved January 17, 2021, from https://assets.kpmg/content/dam/kpmg/in/pdf/2020/08/impacting-digital-
payments-in- india.pdf
6. PwC. (2020, April). Retrieved from https://www.pwc.in/assets/pdfs/consulting/financial- services/fintech/point-of-view/pov-
downloads/impact-of-the-covid-19-outbreak-on-digital- payments.pdf
7. Tungare, V. (2018). A Study on Customer Insight Towards UPI (Unified Payment Interface) - An Advancement of Mobile payment
system. International Journal of Science and Research (IJSR).
8. Vinayak, A. J. (2020, September 7). Covid effect: UPI transactions up significantly post- lockdown. Retrieved from https://www.
thehindubusinessline.com/money-and- banking/covid-effect-upi-transactions-up-significantly-post-lockdown/article32543739.ece
9. https://www.thehindubusinessline.com/money-and-banking/covid-effect-upi-transactions- up-significantly-post-lockdown/
article32543739.ece
10. https://www.npci.org.in/what-we-do/upi/product-statisticS
11. https://www.rbi.org.in/Scripts/BS_ViewBulletin.aspx
12. https://www.indiastat.com/

5 Website : www.researchjourney.net Email : researchjourney2014@gmail.com

Peer Reviewed Referred & Indexed Journals

View publication stats