UPI Payment App Development – A Cost and Benefit Analysis

After the grand launch of UPI (Unified Payments Interface) at the iconic Eiffel Tower during the huge Republic Day Reception, UPI has become a global sensation.

The UPI, also known as an advancement of IMPS, was first launched by the National Payments Corporation of India (NPCI) in association with the RBI and IBA in January 2016. This revolutionary step in the digital payment system took the world by storm with its unparalleled speed, security, and convenience for money transfers. As a result, the app was initially adopted by very few national banks, but within a year, many banks across the world flocked to it and built their own version of the UPI app.

This new-age payment mode serves as a real-time, instant payment platform, enabling users to securely transfer funds, pay bills, recharge phones, book tickets, make purchases, and do a lot more, anywhere, anytime with just a few taps of their digital devices. Simply put, UPI has become a new normal in today’s digital age, replacing cash, cards, and other payment modes.

As per the statistics reported in a daily periodical, UPI has crossed over 10.55 billion transactions in Sept 2023.

Seeing the growing acceptance and popularity of UPI, businesses worldwide are considering UPI payment app development costs and its potential benefits. While quoting the exact cost of UPI payment app development is difficult, on average, it can range from $30,000 to $300,000. The costs can decrease or increase based on the unique project requirements of a business and various other factors (details later). In straight terms, the more complex your app is, the higher it will cost.

UPI Market Growth Statistics

Now before we delve into the cost intricacies of UPI payment app development, let’s first look at some interesting UPI market growth statistics that show us the huge wave of its global adoption, helping you make an informed decision.

• UPI transactions are anticipated to reach 1 billion per day by 2027.
• There were 151 million UPI transactions in January 2018, and this number surged to 10.56 billion by Sept 2023
• By the end of Sept 2023, there was around ₹15.80 trillion value of UPI transactions, about $1,90,39,34,44.
• Countries like the US, Nepal, Bhutan, France, Singapore, Sri Lanka, UAE, Australia, Canada, Hong Kong, the UK, Europe, etc., have already embraced India’s UPI payment services for instant transactions. It set the milestone of 76.28% P2P transactions by June 2023.
• Currently, 484 banks are globally participating in the UPI system, including all the key third-party payment providers like Google Pay, PhonePe, Amazon Pay, Paytm, etc.

Benefits of UPI Payment App Development

UPI payment app development offers numerous benefits for businesses, merchants, and users, making it an ideal choice for anyone wishing to reap the rewards of the payment gateways and digital wallet. Here are some of the key benefits of UPI payment app development on a whole:

User Convenience

UPI payment app development solutions provide users with a convenient and hassle-free way to pay bills and transfer funds anytime, anywhere, using their smartphones or other digital devices. It eliminates the need to carry cash or cards and visit traditional banks.

Security

UPI payment apps leverage advanced encryption techniques and 2FA (double-factor authentication) mechanisms to ensure the security and integrity of transactions. With biometric authentication, UPI PIN, MPIN, and tokenization, users can transact with utmost security, knowing that their financial data is secured against unauthorized access or fraudulent activities.

Speed

UPI enables real-time fund transfers between bank accounts, ensuring swift settlement of transactions. This real-time settlement feature accelerates cash flow, reduces payment processing times, and enhances overall efficiency in financial transactions.

Interoperability

UPI payment apps allow users to transact with individuals and merchants irrespective of their banking affiliations or geographical location. This interoperability enhances convenience and flexibility for users, making UPI a preferred choice for digital transactions.

Scalability and Customization

UPI payment app development provides businesses with opportunities to scale and customize their apps to meet the evolving needs and preferences of users. By incorporating new features, services, and integrations, businesses can make their apps stand out in the market and stay ahead in today’s competitive landscape.

How Secure are UPI Apps and the Transactions?

UPI apps and transactions are secure as they use robust security measures and follow the essential compliances and regulatory standards set by relevant authorities to protect users’ data and prevent fraud. Here are some of the most important guidelines, regulations, and compliances to consider for UPI app development:

• RBI Guidelines: UPI apps must comply with RBI guidelines related to transaction limits, customer authentication, fund settlement, and dispute resolution.
• NPCI Guidelines: All UPI apps must comply with NPCI guidelines to ensure interoperability, reliability, and security of UPI transactions.
• Data Protection Laws: To protect users’ sensitive information, the apps must adhere to data protection laws such as the General Data Protection Regulation (GDPR) in the European Union and the Personal Data Protection Bill (PDPB) in India.
• PCI DSS: Compliance with the Payment Card Industry Data Security Standard (PCI DSS) is mandatory to ensure the safe processing of debit and credit card information and prevent data breaches.
• AML and KYC Regulations: UPI apps must adhere to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations to prevent money laundering and fraud. This involves verifying users’ identities through Aadhaar, PAN, or other government-issued documents.
• Accessibility Standards: Ensuring accessibility for PWDs is increasingly becoming a compliance requirement. Thus, UPI apps should follow accessibility standards such as the Web Content Accessibility Guidelines (WCAG) to make their apps usable by individuals with diverse needs.
• Best Security Practices: Implementing robust security measures like 2FA mechanisms, data encryption, regular security audits, and vulnerability assessments is crucial to enhancing transaction security and compliance with regulatory requirements.
• NPCI Certification: UPI app developers need to undergo NPCI certification processes to validate required compliances and standards for interoperability and security.

By adhering to these industry regulations and compliances, businesses can ensure the uninterrupted performance of their UPI apps.

You may like reading: How enterprises can ensure compliance using blockchain

Analysis of UPI Payment App Development Costs – Considerable Factors

To give you a rough estimate, the cost to develop a UPI payment app can range between $30,000 and $300,000, but there are various factors that affect the costs. App’s complexity, feature list, UI/UX design, location of FinTech app developers, and technological stacks used in development are some key factors affecting the cost of UPI payment app development.

Let’s discuss these cost-determining factors in detail to gain a better understanding of UPI wallet development cost.

App Complexity and Features

The complexity and list of features incorporated into the app have a direct impact on UPI wallet development costs. Basic features like account linking, fund transfer, transaction history, and QR code scanning are essential and can be implemented on a low budget. However, additional functionalities such as bill payments, in-app chat support, biometric authentication, and multi-bank account linking require additional resources and efforts, thus increasing development time and costs.

Here is a brief estimate of UPI wallet development cost and time frame based on the app’s complexity and features.

UI/UX Design

The UI/UX design is a critical factor in determining the overall cost of a UPI payment app. A well-designed UPI wallet with intuitive navigation, appealing visuals, and seamless interactions enhances user engagement and satisfaction, thus requiring more time and affecting development costs.

Platform Compatibility

UPI payment apps need to be compatible with multiple platforms, including iOS, Android, and web browsers, to reach a broader audience. Ensuring compatibility across different device types, screen sizes, and operating system versions adds to the app’s complexity and development cost.

Developing distinct versions of the app tailored for different platforms may initially seem like a cost-saving measure, but when estimating the cumulative costs of multiple versions, the overall investment can escalate significantly.

Third-Party Integrations

Integrating the app with banks’ APIs and payment gateways is a complex and time-consuming process, as each party has its own set of APIs and protocols. Accordingly, the complexity of integration and the number of third-party services involved significantly affect the UPI payment app development cost.

Security Measures

Security is paramount in UPI payment app development to protect users’ sensitive financial information, prevent fraud, and build trust. Implementing security measures like multi-factor authentication, data encryption, biometric techniques, and compliance with regulatory standards like GDPR incurs additional development costs.

Regulatory Compliance

White-label UPI solutions must comply with data protection laws (GDPR), payment processing protocols (PCI DSS), and other regulatory guidelines set by authorities like RBI and NPCI. Activities related to UPI payment app development compliance, such as obtaining necessary licenses, implementing essential measures, and performing compliance audits, entail additional expenses and increase the development cost.

Location of UPI App Developers

The geographical location of app developers can also affect the UPI wallet development costs. For instance, hiring a development team from regions with higher living costs and wages, such as North America or Western Europe, costs higher compared to the regions with lower labor costs, such as Eastern Europe, India, or Southeast Asia.

Choice of Tech-Stack

The selection of technological stacks used in UPI app development, including programming languages, frameworks, and front- and back-end tools, affects the overall cost of developing UPI payment apps. Opting for widely used technologies, such as React Native or Flutter, for cross-platform development may streamline development and reduce costs.

Here is an estimate of technological stacks commonly used in UPI app development:

Must-Have Features in a UPI Payment App

A UPI payment app is meant to provide an unparalleled user experience and contribute to sustainability. Therefore, when planning for your UPI app development, you must focus on integrating features that not only ensure a secure and convenient user experience but also contribute to promoting sustainable practices. Here is a list of some essential features with which a secure and sustainable UPI app, like Paytm, Google Pay, Amazon Pay, etc., is built.

QR Code Payments

QR code scanning is a convenient way to make payments at retail stores, restaurants, or individuals. The app should support scanning QR codes to make payments, leading to less paper waste associated with printing paper-based receipts or invoices.

Recharge and Bill Payments

Integration with utility providers and bill payment service allows users to pay their bills directly via the app. This feature makes the UPI app a one-stop solution to multiple problems. Electricity, water, gas, credit card, phone bills – you name it, the UPI app does it.

UPI ID Generation

The app allows users to make and manage their UPI IDs (virtual payment addresses) linked to their bank accounts. This simplifies the process of receiving payments and removes the need to share sensitive bank information, improving data security and minimizing the risk of paper-based identity theft.

Instant Fund Transfer

It is indeed the most integral feature of a mobile wallet app, enabling users to transfer funds instantly, anywhere, anytime. All they need to do is specify the recipient’s UPI ID, phone number, or QR code, enter the amount, and authorize the payment using their UPI PIN.

Security Features

Implementing robust security features, such as biometrics, MPIN (Mobile PIN), and multi-factor authentication, not only protects users’ financial data but also reduces the need for physical documents and signatures traditionally used for authentication purposes.

Notifications and Alerts

Real-time push notifications and alerts keep users informed about account activity, transaction status, payment reminders, and promotional offers. This feature enhances user engagement and ensures timely communication.

Multi-Bank Account Linking

This feature allows users to link and manage multiple bank accounts within a single interface for seamless fund management. It reduces the need for physical visits to multiple bank branches or ATMs, thereby saving time, resources, and fuel consumption.

Profile Registration

The app should facilitate users to easily register and manage their profiles within the app. This includes verifying their mobile number, linking their bank account(s), and setting up a UPI PIN for authentication.

Transaction History

A UPI app must-have feature is to provide a comprehensive history of past payments, wallet balances, etc. It should include details of all past transactions, including date, time, amount, and recipient/sender information. Keeping track of past payment history has never been easier!

24/7 Customer Support

The app should offer round-the-clock customer support to promptly address users’ queries, issues, or concerns they may encounter. This includes an AI chatbot, FAQs section, helpline numbers, and email support.

UPI Mandates

UPI mandates allow users to schedule recurring payments or authorize future transactions in advance. This feature is useful for businesses with periodic payment requirements or subscription-based services.

For instance, users can authorize Netflix subscriptions to be automatically debited from their bank accounts using UPI mandates. Or, users can get their reading plans of a periodical renewed automatically using UPI. The UPI app allows users to create, manage, and cancel the UPI mandates for pre-authorized transactions anytime and also notifies them in advance before auto-debiting the payment for the associated service.

Promotions and Offers

The UPI app provides users with access to promotional deals, discounts, and cashback offers from partner merchants and service providers. Also, some UPI apps offer lucrative rewards and cashback to users for making payments on their platform. This feature incentivizes digital transactions and encourages users to adopt sustainable payment methods.

Also Read: Customer loyalty app development – Benefits, process, costs

Product/Service Listing

Businesses can create their own virtual store within the app by listing their products or services, allowing users to browse and buy their desired products directly through the app. This feature enhances users’ shopping experience and promotes eco-friendly digital transactions.

Overdraft Facility

Providing users with access to overdraft facilities allows for temporary extensions of credit beyond the available account balance, providing financial flexibility when needed. This feature promotes responsible spending and can help users avoid the need for short-term loans or credit cards.

Multi-Language Support

It is one of the most essential features of a UPI payment app, ensuring inclusivity and accessibility for users from diverse linguistic backgrounds. This feature allows users to navigate the app, make payments, and access support services in their preferred language, enhancing the user experience and promoting broader adoption of the app worldwide.

UPI Payment App Development Process

As highlighted before, the number of countries accepting UPI payment systems is rising exponentially, contributing to the rapid development of the UPI growth market. Seeing the global inclination towards UPI trends, businesses are increasingly turning towards building their own UPI applications.

However, developing a UPI app is a complex and challenging endeavour, requiring the assistance of a professional UPI app development service company.

A UPI wallet app development process goes through several steps, like thorough market research, project analysis, planning, UI/UX design, seamless feature integration, rigorous testing, and ongoing maintenance.

For an in-depth insight into the UPI app development process, refer to our detailed guide on Mobile App Development for Businesses.

Build Secure and Scalable UPI Apps with Appinventiv

UPI payment app development requires careful consideration of regulatory compliance, security standards, and user experience to enhance engagement and secure transactions. Thus, partnering with a reliable and reputed FinTech app development company that has prior experience in building GDPR, PCI-DSS, and other regulatory standards software is essential to ensure the success of UPI apps. It is where Appinventiv emerges as an ideal partner for businesses embarking on the journey of UPI payment app development.

With our comprehensive understanding of regulatory requirements, certifications, robust security measures, and commitment to delivering superior user experiences, businesses can confidently navigate the complexities of UPI wallet apps and bring a sustainable product to the market.

Our skilled team of 1500+ tech experts has delivered 3000+ successful projects so far, including the financial literacy platform, Edfundo; the GDPR-compliant app, Slice; budget management app, Mudra; and PCI DSS-compliant platform USA MedPremium.

We leverage cutting-edge technologies, best coding practices, security measures, and industry insights for UPI integration and development, meeting regulatory compliance, enhancing user experience, and driving global adoption in the realm of digital payments.

Let’s join hands and contribute to a greener future with UPI payment app development.

FAQs

Q. How does UPI payment achieve sustainability?

A. UPI payment helps a business achieve sustainability by reducing reliance on cash transactions, minimizing paper-based processes such as receipts and invoices, and promoting digital financial inclusion. By enabling seamless digital transactions through digital devices, UPI reduces the environmental impact associated with printing, transportation, and disposal of paper currency and receipts.

Additionally, UPI’s interoperability and accessibility contribute to financial inclusion by providing convenient and secure banking services to PWD populations, promoting economic empowerment and sustainable development.

Q. How long does it take to build a UPI payment app?

A. The time required for UPI payment app development varies depending on various factors such as the complexity of features, design requirements, UPI integration with banks and payment gateways, compliance with regulatory standards, and so on.

Typically, developing a basic UPI wallet app with essential features takes around 4 to 6 months, while more complex apps or UPI 2.0 apps with advanced features take 6 months to a year or more.

To know the exact time required to make a UPI app, discuss your project idea with our FinTech development team.

Q. What makes a UPI app successful?

A. A seamless user experience, robust security features, widespread adoption, interoperability with various banks, and efficient payment systems are some of the most common features that make a successful UPI app stand out of the crowd.

It also offers convenience, speed, and cost-efficiency in transactions while complying with regulatory standards and fostering trust among users.

THE AUTHOR

Sudeep Srivastava

Co-Founder and Director