17 Feb 2026·Source: The Indian Express

4 min

EconomyScience & TechnologyNEWS

RuPay, UPI poised for growth in value-added services: Report

RuPay and UPI are set to expand into value-added services.

A recent report highlights the potential of RuPay and UPI to expand into value-added services, offering new opportunities for growth and innovation in the digital payments ecosystem. UPI's success in low-value transactions presents challenges and immense opportunities for innovation.

The focus is on leveraging these platforms to provide additional services to consumers and businesses, enhancing their utility and driving greater adoption of digital payment methods. This development is significant for India's financial inclusion efforts and the promotion of a cashless economy.

Key Facts

RuPay and UPI have the potential to expand into value-added services.

UPI's success in low-value transactions presents both challenges and opportunities.

The focus is on leveraging these platforms to provide additional services to consumers and businesses.

This development is significant for enhancing the utility and driving greater adoption of digital payment methods.

UPSC Exam Angles

GS 3 (Economy): Digital payments, financial inclusion, role of technology in economic development

Connects to syllabus areas of: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Government Budgeting; Inclusive Growth and issues arising from it.

Potential question types: Statement-based MCQs on UPI features, benefits, and challenges; Analytical questions on the impact of digital payments on financial inclusion and economic growth.

In Simple Words

RuPay and UPI are already popular for making payments. Now, there's a push to add more services on top of these, like offering insurance or credit. This could make using digital payments even more useful.

India Angle

For an Indian shopkeeper, this could mean getting a small loan directly through their UPI app. For a farmer, it might mean easily buying crop insurance using RuPay.

For Instance

Think of it like your phone's app store. Initially, it only offered basic apps, but now it has apps for everything from banking to entertainment. UPI is aiming to do the same with financial services.

If you use UPI or RuPay, this could mean more convenient access to financial services right at your fingertips. It could simplify things like getting insurance or managing your money.

UPI is not just for payments anymore; it's becoming a one-stop shop for financial services.

More Information

Background

The Unified Payments Interface (UPI), launched in 2016, revolutionized digital payments in India by enabling real-time fund transfers between bank accounts via a mobile app. It was developed by the National Payments Corporation of India (NPCI). UPI's interoperability and ease of use have driven its widespread adoption, particularly for small-value transactions. The RuPay card, also an NPCI initiative, provides a domestic alternative to international payment networks, promoting financial inclusion and reducing reliance on foreign entities. Before UPI, digital payment methods were less integrated and often cumbersome. Traditional methods like NEFT and RTGS were time-consuming and not suitable for everyday transactions. Credit and debit cards, while convenient, had lower penetration in rural areas and among lower-income groups. The introduction of UPI addressed these challenges by providing a simple, secure, and accessible payment solution for all. The success of UPI and RuPay is closely linked to the government's push for a cashless economy and financial inclusion. Initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY), which aimed to provide access to banking services for all households, created a foundation for the adoption of digital payment methods. The government has also actively promoted the use of UPI and RuPay through various incentives and awareness campaigns.

Latest Developments

In recent years, there has been a growing focus on expanding the functionalities of UPI beyond simple peer-to-peer transactions. The introduction of features like UPI AutoPay for recurring payments and UPI 123Pay for feature phone users aims to enhance the versatility and accessibility of the platform. These developments align with the broader goal of deepening digital financial inclusion and catering to diverse user needs. Regulatory bodies like the Reserve Bank of India (RBI) are actively exploring ways to promote innovation and competition in the digital payments space. The RBI has been consulting with stakeholders on potential measures to reduce transaction costs, enhance security, and improve the overall user experience. This includes exploring the possibility of linking credit cards to UPI and allowing non-bank payment system operators to participate more actively in the UPI ecosystem. Looking ahead, the focus is on leveraging UPI and RuPay to create a comprehensive digital payment ecosystem that supports a wide range of use cases. This includes enabling seamless integration with e-commerce platforms, facilitating cross-border payments, and providing value-added services like insurance and lending. The success of these efforts will depend on continued collaboration between government, regulators, and private sector players.

Frequently Asked Questions

1. What are RuPay and UPI, and why are they important for India's economy?

RuPay is a card payment network, and UPI is a real-time payment system that facilitates instant fund transfers between bank accounts via mobile. They are important because they promote digital transactions, financial inclusion, and a cashless economy.

2. How does UPI's success in low-value transactions present both challenges and opportunities?

UPI's success in low-value transactions presents challenges such as maintaining profitability for payment service providers due to small transaction fees. However, it also presents opportunities for innovation in value-added services and expanding the user base.

3. What are the potential value-added services (VAS) that can be integrated with RuPay and UPI?

Potential VAS include services like UPI AutoPay for recurring payments, UPI 123Pay for feature phone users, loyalty programs, and customized financial products. The focus is on leveraging these platforms to provide additional services to consumers and businesses, enhancing their utility and driving greater adoption of digital payment methods.

4. What recent developments have enhanced the versatility and accessibility of the UPI platform?

Recent developments include the introduction of features like UPI AutoPay for recurring payments and UPI 123Pay for feature phone users. These align with the goal of deepening digital financial inclusion and promoting a cashless economy.

5. How do RuPay and UPI contribute to financial inclusion in India?

RuPay and UPI contribute to financial inclusion by providing accessible and affordable digital payment solutions, especially for those in remote areas or with limited access to traditional banking services. UPI's user-friendly interface and interoperability have driven its widespread adoption, particularly for small-value transactions.

6. For UPSC Prelims, what key facts should I remember about UPI?

Remember that UPI was launched in 2016 and developed by the National Payments Corporation of India (NPCI). It enables real-time fund transfers between bank accounts via a mobile app. Focus on its role in financial inclusion and promoting a cashless economy.

Exam Tip

Focus on the developing organization and the year of launch.

Practice Questions (MCQs)

1. Which of the following statements is/are correct regarding the Unified Payments Interface (UPI)? 1. UPI is developed by the Reserve Bank of India (RBI). 2. UPI enables real-time fund transfers between bank accounts. 3. UPI is primarily designed for large-value transactions.

A.1 only
B.2 only
C.1 and 3 only
D.1, 2 and 3

Show Answer

Answer: B

Statement 1 is INCORRECT: UPI was developed by the National Payments Corporation of India (NPCI), not the RBI. Statement 2 is CORRECT: UPI enables real-time fund transfers between bank accounts via a mobile app. Statement 3 is INCORRECT: UPI is widely used for small-value transactions, although it can also handle larger transactions.

2. Consider the following statements regarding RuPay: 1. RuPay is a domestic card payment network launched by the Reserve Bank of India (RBI). 2. RuPay aims to reduce reliance on international payment networks. 3. RuPay cards are only accepted in India.

A.1 only
B.2 only
C.1 and 3 only
D.2 and 3 only

Show Answer

Answer: B

Statement 1 is INCORRECT: RuPay was launched by the National Payments Corporation of India (NPCI), not the RBI. Statement 2 is CORRECT: RuPay aims to provide a domestic alternative to international payment networks. Statement 3 is INCORRECT: RuPay cards are accepted in several countries outside India.

3. In the context of digital payments in India, what is the primary objective of the Pradhan Mantri Jan Dhan Yojana (PMJDY)?

A.To promote credit card usage among rural populations
B.To provide access to banking services for all households
C.To subsidize digital payment transactions
D.To regulate the digital payment industry

Show Answer

Answer: B

The Pradhan Mantri Jan Dhan Yojana (PMJDY) aims to provide access to banking services for all households, promoting financial inclusion and creating a foundation for the adoption of digital payment methods. While it indirectly supports digital payments, its primary objective is broader financial inclusion.