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A look at how UPI has moulded spending patterns of millennials and gen z

technology | Jan 24, 2023 10:01 PM IST

A look at how UPI has moulded spending patterns of millennials and gen-z

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Unified Payments Interface or UPI has been one of the biggest generational changes that has swept India. The country's millennial and gen-z population has lived through this transformation -- and been quick to get hooked on to this new trend. As part of CNBC-TV18's on-going series "The UPI Generation", Radhika Udas reports on the biggest use-cases for this payment revolution.

Unified Payments Interface or UPI has been one of the biggest generational changes that has swept India. The country's millennial and gen-z population has lived through this transformation -- and been quick to get hooked on to this new trend. As part of CNBC-TV18's on-going series "The UPI Generation", Radhika Udas reports on the biggest use-cases for this payment revolution.

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For India's millennials and gen-z, the evolution of this choice has unfolded before their eyes -- from having to carry cash, they moved to debit and credit cards... then to the ease of net banking... and now, they have the choice to scan-and-pay using just their mobile phones. Experts say this choice has also moulded the spending patterns of these two generations.
A CNBC-TV18 poll of young Indians residing mainly in urban areas revealed that these youngsters most often whip out their UPI apps when ordering food through food aggregator apps -- 79 percent of them said this is their most employed use-case. Physically buying food at restaurants and groceries at stores comes second, at 72 percent... with online shopping a close third at 70 percent. Paying for cabs on aggregator apps like Ola and Uber rank fourth, at 65 percent.
But this popularity goes beyond just ease of payments. It's also about low transaction costs.
Arpit Kabra, Founder & Head Chef at Hungry Head said, "Since UPI has launched, people have stopped using cards also, majority want to scan and pay, there are no deductions, in cards there are deductions. We do 20-25 percent sales through online food aggregators.  I myself use UPI for all transactions, I don't keep cash."
So what are the favourite apps?
Google Pay, Paytm and PhonePe top the list -- with a majority of the respondents picking Google Pay as their #1 choice.
It's not just online stores and businesses that have seen a jump in business due to increased adoption of UPI. It has also changed the way brick and mortar consumer-facing entities operate -- whether they're mom-and-pop stores, or restaurants, or clothing stores, or even travel agents.
Ranen Banerjee, Partner at PwC said, "When making payments the biggest challenge that we had was the change, that expression- 'bhaiya, change dena', shopkeeper running to other shop for change or struggling for change, store giving candies for change, but now with UPI coming in, it doesn't matter if the bill is ending with Rs 3 or Rs 7."
The success of UPI in India has become a talking point for the government.
At a recent Google event, Information Technology Minister Ashwini Vaishnaw said the UPI platform is already being deployed in countries like Nepal, UAE, France and the UK…. and India is in talks with 30 other countries to expand the UPI footprint further.
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