India's Unified Payments Interface (UPI) completely changed the economy in India. The idea was to connect all banks and financial companies to a unified central system instead of each bank having its own silo.
This system allows anyone to send or receive money from any bank to another in seconds without an account number or IFSC, just using a simple alias like ali@hdfc or mohamed@icici. This is known as a UPI ID, similar to an email but linked directly to your bank account.
Every transaction goes through two instant phases: Clearance and Settlement, all within seconds via a network managed by the central body, NPCI.
The system connected banks, wallets, merchants, and users into one network. Transactions are almost free, instant, and secure. Payment gateways can now connect directly to the system via unified APIs instead of connecting with each bank individually.
Thanks to this innovation, India now executes over 15 billion transactions monthly via UPI, and the system has become part of daily life... from small grocery stores to major corporations.