Everyday there are millions of Indians who take out phones from their pockets to make a payment. Whether it is paying electricity bills or paying at the grocery store, the magic of UPI has taken over the entire country and it continues to spread. Using UPI is as easy as calling your friends. But have you ever wondered which was the first UPI app in India? The answer will surprise you.
What Is UPI?
UPI stands for Unified Payments Interface. It is developed by the National Payments Corporation of India's (NPCI) as an instant payment service that lets you transfer funds from one bank account to another from your mobile phone and using a unique UPI ID.
The NPCI website mentions: “Unified Payments Interface (UPI) is a system that empowers users to add multiple bank and other allowed accounts (of any participating bank) into a UPI App, merging several banking features, seamless fund routing & merchant payments under one hood.”
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When Did UPI Start in India?
UPI was first piloted by the National Payments Corporation of India (NPCI) on 11 April 2016 among a few banks. The final version of UPI was released a little later in 2016. Before the launch of UPI, sending money required the bank account number, IFSC code and branch details and this was somewhat troublesome for many.
PIB mentions: “India has emerged as the global leader in fast payments, according to a recent note by the International Monetary Fund titled Growing Retail Digital Payments: The Value of Interoperability. At the heart of this transformation is the Unified Payments Interface, better known as UPI. Launched in 2016 by the National Payments Corporation of India, UPI has changed how people send and receive money in the country. It brings all your bank accounts together in one mobile app. You can transfer money instantly, pay merchants, or send funds to friends with just a few taps. Its appeal lies in its speed and ease of use. Today, UPI processes over 18 billion transactions every month in India.”
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Which was the First UPI App in India?
Here's where it gets quite interesting. There are two possible answers in the context of the first UPI app.
PhonePe: The First Third-Party UPI App
Payments app PhonePe and Yes Bank launched India's "first" mobile UPI payments app. At that time, Yes Bank was one of the first 21 banks to launch UPI. PhonePe was the first private company to launch the UPI app. It was downloadable via the Google Play Store and was a subsidiary of Flipkart.
The PhonePe website mentions: “August 2016 feels like a different lifetime now, back when cash was king, wallets were heavy, and UPI was a term only a few people in tech circles knew about. It was then PhonePe placed its bets on a brand-new payment rail, believing that one day, money could move as swiftly as a text message!”
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BHIM: First Government UPI App
BHIM (Bharat Interface for Money) is an app developed by the National Payment Corporation of India (NPCI) and was launched by Prime Minister Narendra Modi on 30 December 2016, to increase financial inclusion in India and build a cashless and digital economy. This was the first UPI app released by the government in December 2016.
The BHIM website mentions: “Bharat Interface for Money (BHIM) is a payment app that enables simple, quick, and easy transactions using the Unified Payments Interface (UPI). With the BHIM app, you can make direct bank payments to anyone on UPI using their UPI ID or by scanning their QR code. You can also request money from a UPI ID through the app. Pioneered and developed by the National Payments Corporation of India (NPCI), BHIM was launched by the Hon'ble Prime Minister of India, Narendra Modi, on December 30, 2016. The app aims to promote financial inclusion and make India a digitally empowered society.”
Therefore, if you are driven by the question "which was the first UPI app by the government?" The answer is BHIM which was launched on 30 December 2016 by the National Payments Corporation of India (NPCI). If you are referring to the first commercial UPI app then it is the PhonePe app launched in August 2016 in partnership with Yes Bank. Both of these platforms played a major role in bringing the benefits of digital payments to the masses in India.
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