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Everything Else You Need to Know On How UPI Apps Make Money | Business Model of Various UPI Apps Explained



How UPI Apps Make Money

India has undergone a significant digital revolution as a result of UPI apps. We’ve witnessed significant improvements in technology over the last two decades, but I believe cashless transactions and UPI payment choices are the greatest. So, in today’s article, we’ll look at how UPI operates and how they make money in this competitive market. Rather, we will walk through the entire technique step by step to ensure that we fully comprehend the business function.

How can we describe a UPI based on the premise of the article? A smartphone application known as a Unified Payment Interface (UPI) allows users to transfer funds between bank accounts. The National Payments Corporation of India has created a single-window mobile payment system (NPCI).

What is meant by UPI ID and PIN?

A UPI ID is a one-time code that we can use to transfer and receive money from a bank account. The UPI PIN is a four-digit personal identification number that must be input to authorize a money transfer via UPI. The account holder can choose his or her PIN.

Funding, Revenue, and Business Model of UPI Apps | How do Payments Apps Make Money?

UPI apps make money from a variety of sources and we have jotted each one of them clearly below. They are as follows

Recharges on mobile phones – Recharges on mobile phones are UPI’s main source of revenue. When a consumer uses these apps to pay for a cell phone recharge, they receive a commission.

Payment of different Bills – One of the most useful and important advantages of UPI apps, which has helped it become so popular among users, is that they can be used to pay a variety of expenses, such as DTH bills, light bills, and so on.

UPI Transactions – It’s possible that they will earn no money. Nonetheless, it gains access to user data, which it then uses to give services and product ideas that will properly pique their interest, increasing their engagement with the app and so expanding its user base.

Movies booking and travel agents – Some apps have recently entered the model of an online travel agency (OTA). Customers can book train, air, or bus tickets under this section of the Business Model. It also offers hotel reservations and cinema ticket reservations.

Listing and convenience fees – To sell their products through the Paytm portal, they charge vendors listing and convenience fees. This is one of the revenue-generating options for PayTM.

Paytm mall – It enables vendors to list and sell their items on the Paytm platform. It does this by charging sellers a commission, which varies depending on the product category.

Do Check: How to Add Money in Paytm Wallet

In-store payments at Paytm-enabled grocery stores, vegetable and fruit markets, restaurants, tolls, parking, pharmacies, and educational institutions.

So those were the several revenue streams from which the UPI apps make money.

How do UPI Apps Make Money? | Business Model of Apps Phonepe, Google Play, etc.

  • Google Pay and Phone Pe, for example, are not yet profitable UPI payment services. This is because UPI and Rupay transactions are completely free. These businesses do, however, make money: they get fees from telecom operators when we recharge our phones. They get commissions on DTH, insurance, and electricity bills when we pay them. They get compensation when we make online purchases through this app.
  • Advertising banners and pop-ups are commonplace in apps for anyone who uses them. It is the primary source of revenue for most apps. Payment apps, on the other hand, are devoid of these overt advertising opportunities. Rather, transaction fees may be used to fund these apps.
    • When it comes to Google Pay, it’s a UPI-based digital payment tool that allows you to send money to any other GPay user using their phone number. Recharges for mobile phones are Google Play’s main source of revenue.
    • Tez and PhonePe are two UPI-based digital payment apps that let you send money to any other UPI user using their phone number. The corporation does not profit from this, but it does have access to user data that it can use to improve its product in the future.

Benefits of Using UPI Payments

  • It’s the quickest, easiest, and cheapest way to transfer money because you can do it from anywhere at any time.
  • This only takes one click and two factors to authenticate.
  • Completing a transaction simply requires the UPI ID.
  • Any sensitive information about the account does not need to be shared, stored, or remembered.
  • On the UPI app, you may quickly link all of your accounts to one ID.
  • You won’t need to carry cash if you use the UPI app. Even using ATMs is not needed, let alone having checks cashed. Simply scan the QR code to make purchases both online and offline.
  • This app’s collect payment option can also be used to receive payments from customers.
  • It enables real-time money settlement.
  • You can file a complaint straight using the UPI app if you have one.

FAQs on How UPI Payment Apps Make Money

1. Name some of the most popular UPI Apps in India?

  • Paytm
  • PhonePe
  • GPay
  • Bhim UPI

2. Do UPI apps earn enough revenue to generate profits?

The UPI software is unable to make a profit; certainly, income has increased over time, but profits or additional incentives have not increased.

3. What is the UPI Model?

UPI is a single platform that combines several banking services and features into one convenient location. All you need is a UPI ID and PIN to send and receive money. Real-time bank-to-bank payments can be done with just a telephone number or a virtual payment address (UPI ID).

Wrapping Up

So, as we can see from the conclusion of today’s post, there are a variety of ways in which UPI applications like Paytm, Gpay, and Phonepe generate revenue, such as a commission for each recharge we do with them. As far as we can tell from what we’ve read and learned about the UPI app and its revenue creation process, they’re making fair money with their present resources, but that’s not enough to produce impressive profits, therefore they should experiment with new features and software to generate more cash. When it comes to privacy and security, UPI apps provide solid privacy rules and an easy-to-use input method for their users. Do check out some other interesting articles like Top ways to make money online with Google.

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