A Complete Guide on How to Develop a Secure and Feature-Rich UPI Payment App in 2024


Pragya Chauhan

May 17, 2024

The landscape of financial transactions in India has undergone a significant shift in recent years. The widespread adoption of UPI payment applications has revolutionized the way individuals and businesses manage their finances.

From urban centers to rural communities, UPI apps have facilitated a seamless transition to digital payments.

This technology offers a convenient and efficient alternative to traditional cash and card-based transactions, encompassing a wide range of daily financial activities.

Recognizing the potential of UPI, numerous enterprises across India are actively exploring the development of their own UPI applications.

If you’re one of them, keep reading because this guide is going to provide you a step-by-step roadmap of the process involved in building a secure and feature-rich UPI payment app in 2024 and a lot more.

What is a UPI App?

A Unified Payments Interface (UPI) app is a mobile application that allows users to transfer money between bank accounts.

It is a single-window mobile payment platform developed by the National Payments Corporation of India (NPCI). With a UPI app, customers don’t need to enter bank details or other sensitive information each time they initiate a transaction.

How Does the UPI App Work

A UPI payment app combines several bank accounts into a single UPI-enabled mobile app, merging a range of features from any participating bank, thereby allowing seamless fund transfers from customers and merchants.

To send money, the user uses a UP-integrated app and selects the Pay or Send option. After entering the recipient’s details such as UPI ID or mobile number, and the desired amount, they select the bank account or wallet from which the money is to be debited.

After that, they enter the UPI pin to confirm the transfer, post which the transaction request is forwarded to their chosen payment service providers (PSP).

On the other hand, if a user wants to receive money, they log into the UPI application and select the collect or request money option. After giving the payer’s Virtual Payment Address (VPA) and the desired amount, they select the bank account in which the money is to be credited.

A money request message then goes to the payer, post which they enter the UPI PIN to approve the transaction request.

Explore More: Development of Top-Notch Fintech App for iOS & Android in 2024

UPI Payment App Market Growth Statistics

Before you start your UPI development project it’s essential to have a look at the UPI app market share and see what UPI market statistics suggest which will ultimately help you make an informed decision.

  • It’s estimated that UPI will record 1 billion transactions per day by 2027.
  • There were 151 million UPI transactions in January 2018, and this number rose to 10.56 billion by Sept 2023
  • By the end of Sept 2023, there was around ₹15.80 trillion value of Unified Payments Interface 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 started using India’s UPI payment services for instant transactions.
  • As of 2024, 484 banks are globally engaging in the UPI system, including all the key third-party payment providers like Google Pay, PhonePe, Amazon Pay, Paytm, etc.

Most Popular UPI Applications in India

If you’re considering developing a UPI payment app. In that case, it’s best to learn from the top eWallet applications and see what makes them different and famous in the market.

This will help you create a UPI app that is better and unique from all. Here are some of the most popular UPI apps in India:

  • PhonePe: A popular digital wallet & online payment app that allows users to make instant money transfers with UPI. The app has a user-friendly interface and a wide range of features, including bill payments, recharges, and shopping.
  • Google Pay: Another well-known platform with a strong focus on security and privacy. Google Pay secure UPI payment app is a payment service developed by Google to allow users to make payments with Android phones, tablets, or watches.
  • Paytm: One of the earliest UPI apps in the Indian market, Paytm provides a wide range of features, including mobile wallets, online shopping, and financial services.
  • BHIM: It’s an official UPI app from the National Payments Corporation of India (NPCI). BHIM UPI app is one of the most convenient options for users to make UPI payments.

  • Amazon Pay: An online payments processing service owned by Amazon, Amazon Pay offers a seamless integration with the Amazon shopping experience, making it easy to pay for purchases with UPI.

Benefits of Developing a UPI Payment App

So, why should you develop a UPI payment app? This is one of entrepreneurs' most common questions when considering building a UPI app. There are many reasons and benefits to UPI app development, and here are some of them.

1. Tap into the Digital Payment Boom

In today's digital realm, the popularity of digital payment platforms is booming. Creating a UPI-enabled app can position your business at the forefront of this revolution.

By offering a mobile app to your customers for UPI services, you can stay ahead of the curve and meet the evolving needs of your customer base.

2. Increase Sales and Revenue

Your UPI earn money app streamlines the payment process, allowing customers to purchase quickly. This streamlined payment method ensures that customers can complete transactions, which leads to increased sales and revenue for your business.

Additionally, by accepting mobile wallet payments, you can serve a broader customer base and eventually attract more sales. In short, you'll have numerous opportunities to apply fintech monetization strategies and generate healthy revenue via your app.

3. Improve Customer Convenience

Like all other digital payment solutions, UPI provides unparalleled convenience to users. With a UPI payment app, your customers can seamlessly make payments, transfer money, pay bills, and access many other amazing features with just a few clicks on their smartphones.

This level of convenience is a significant driver of customer satisfaction, as it simplifies their day-to-day financial transactions and makes their experience easy and efficient.

4. Enhance Customer Loyalty

With advanced and secure features, user-friendly UPI payment apps significantly enhance customer loyalty and build digital trust.

When your customers find using your app services smooth and hassle-free, they are more likely to remain loyal and continue using your services. This will help you build long-term relationships and strengthen the bond between your brand and its customers.

5. Streamline Business Operations

Automating payment processes through your UPI wallet app can increase efficiency in your business operations.

You can collect payments swiftly, eliminating the need for manual intervention. This will save you time and resources and improve cash flow and overall business operations.

6. Global Expansion

Although UPI was first introduced in India, technological advancements have occurred worldwide. Soon, the UPI application won't be limited to a specific region and country.

By building a UPI payment platform, you can expand your business internationally, reaching customers across borders and opening up new opportunities for growth and expansion. This worldwide reach can help your company tap into previously untapped markets and customer segments.

7. Gain Data Analytics and Insights

A fintech app like UPI payment app can provide valuable insights into customer behavior and transaction patterns. Examining this data allows you to customize your products and services to align with customer preferences.

These user insights can also allow you to make data-driven decisions that benefit your marketing strategy, ultimately improving customer satisfaction and business performance.

8. Maintain a Competitive Advantage

Another benefit of UPI app payment development is that it can give you a competitive edge and become successful among people. Customers are likelier to choose businesses that provide convenient and secure digital payment options.

By providing such a solution, you can attract more customers and outperform competitors who have not yet embraced this technology.

How Much Does it Cost to Build a UPI Payment App?

Building a UPI app can not only generate more revenue and sales for your business but can also provide you with a competitive advantage.

Now that you’ve solid reasons why you should choose to develop a UPI app, you may be wondering how much will UPI payment app development cost.

So, the average cost to develop a Unified Payments Interface can range between $30,000 and $300,000, ( ₹2,400,000 to ₹24,000,000) but there are various factors that affect the costs.

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

1. App Complexity and Features

The complexity and list of features added to the app has a direct impact on UPI payment app development cost. Basic features such as fund transfer, account linking, transaction history, and QR code scanning are essential and can be implemented on a low budget.

But, additional features like 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 the breakdown the of the UPI development cost and time frame based on the app’s complexity and features.

2. UI/UX Design

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

3. Platform Compatibility

This is another factor that impacts the cost of developing a UPI app. UPI applications need to be compatible with multiple platforms, including iOS, Android, and web browsers, to reach a broader audience.

Ensuring the app is compatible across different device types, screen sizes, and operating system versions adds to the app’s complexity and development cost.

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

4. Third-Party Integrations

Integrating the mobile payment app with banks' APIs and payment gateways is a complex and time-consuming process, as each party has its APIs and protocols.

Depending on the complexity of integration and the number of third-party services involved significantly affect the UPI payment app development cost.

5. Security Measures

When developing a cashless payment app, security is paramount to protect users' sensitive financial information, prevent fraud, and build trust.

However, adding security measures like multi-factor authentication, data encryption, biometric techniques, and compliance with regulatory standards like GDPR incurs additional development costs.

6. Regulatory Compliance

White-label UPI systems 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 digital wallet app development compliance, such as obtaining necessary licenses, implementing essential measures, and performing compliance audits, entail additional expenses and increase the development cost.

7. Location of UPI App Developers

The geographical location of app development agencies or developers that you’re hiring can also affect the UPI wallet development costs.

For example, 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 labour costs, such as Eastern Europe, India, or Southeast Asia.

8. Choice of Tech-Stack

The technology stack you are selecting to use in the UP app development, including programming languages, frameworks, and front- and back-end tools, affects the overall cost of developing UPI payment apps.

React Native or Flutter are some of the widely used technologies for cross-platform development that may streamline development and reduce costs.

Must Read: How Much Does it Cost to Put an App on the App Store?

How do UPI Apps Make Money?

UPI transactions themselves might seem free for users, but by developing a UPI payment app you can generate revenue through several means:

1. Commission income

This is one of the most popular strategies how UPI apps earn money. You can partner with brands and service providers and earn commissions by promoting their products and services within your app.

This could involve offering discounts or cashback to users who make transactions related to those promotions. Imagine including deals from online retailers where users can pay using your UPI payment app.

You can also partner with banks to offer in-app financial services like micro-loans, investment options, or insurance products. You would earn a commission for each successful transaction of these financial products facilitated through your app.

2. Subscription revenues

You could offer a subscription model to Kirana stores to use your UPI-enabled POS machines or QR code technology for accepting customer payments.

3. Quick loan disbursements

As banks sometimes take time to analyse loan applications and approve loans, UPI apps began out with immediate loans, merchant loans, and personal loans. These loans can allow you to earn 2.5% to 3.5% of the loan amount upfront.

4. Collection

Your business can also end up taking money from customers on behalf of your lenders, earning 0.5% to 1.5% of the total amount of the current disbursement.

5. Data collecting for marketing services

UPI apps collect anonymized user data on spending habits and preferences.  With user consent and adhering to privacy regulations, you could use this anonymized data for targeted marketing and advertising within the app or even sell it (anonymously) to other marketing firms to understand market trends.

What Features You Should Add to Your UPI Payment App

The objective of the UPI app is to provide an unparalleled user experience and contribute to sustainability.

Hence, when planning for your P2P payment app 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 important features with which a sustainable UPI payment app, like Google Pay, Paytm, and Amazon Pay, is built.

1. QR Code Payments

QR code scanning makes the whole payment process highly convenient at restaurants, retail stores, and individuals.

Thus, your UPI app should support scanning QR codes to make payments, leading to less paper waste associated with printing paper-based receipts or invoices.

2. Recharge and Bill Payments

By integrating your UPI payment app with utility providers and bill payment service providers will allow your customer to pay their bills directly via the app.

This feature makes the UPI application a one-stop solution to multiple problems. Whether it’s mobile recharge, electricity, water, gas, or credit card, the UPI can do it all.

3. UPI ID Generation

This feature allows users to make and manage their UPI IDs linked to their bank accounts. This simplifies the process of receiving payments and removes the need to share sensitive bank information, which ultimately improves data security and reduces the risk of paper-based identity theft.

4. Instant Fund Transfer

One of the must-have features that your UPI app should include, allowing users to transfer money instantly, anywhere and anytime.

All they have to do is enter the recipient's UPI ID, phone number, or QR code, enter the amount, and validate the payment using the UPI pin.

5. Profile Registration

The UPI payment app should allow users to easily register and manage their profile within the app. As you can see the above example of the profile registration feature given in the PhonePay application.

This includes verifying their mobile number, linking their bank account(s), and getting and setting up a UPI PIN for authentication.

6. Transaction History

UPI systems must have a transaction history feature to provide users with a history of past transactions, wallet balances, etc. It should include details of all payments including date, time, amount, and recipient/sender information.

7. Security Features

Today where cybersecurity threats are constantly increasing, 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.

8. Notifications and Alerts

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

9. Multi-Bank Account Linking

Multi-bank account linking is another essential feature of a UPI payment app that allows users to link and manage multiple bank accounts within a single interface for seamless fund management.

It eliminates the need for frequent physical visits to multiple bank branches or ATMs, thereby saving time, resources, and fuel consumption.

10. 24/7 Customer Support

Aside from the above given UPI app features, your app should also be able to offer round the clock customer support to quickly address users' queries, issues, or concerns they may have. You can do it by adding AI-powered chatbot, FAQs section, helpline numbers and email support.

11. Product/Service Listing

Businesses can create their own virtual store within the UPI app by listing their products or services, enabling users to browse and buy their desired products directly through the app.

12. UPI Mandates

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

For instance, users can approve Netflix subscriptions to be automatically debited from in their bank accounts using UPI mandates.

Your UPI platform should allow users to create, manage, and cancel the UPI mandates for pre-authorized transactions anytime and also notify them in advance before auto-debiting the payment for the associated service.

13. Promotions and Offers

UPI applications give customers access to promotional deals, discounts, and cashback offers from partner merchants and service providers.

As seen in an example of Paytm UPI above, some UPI apps also offer lucrative rewards and cashback to users for making payments on their platform. This feature promotes digital transactions and encourages users to adopt sustainable payment methods.

14. Multi-Language Support

It is one of the must-have features of a UPI payment app that ensures inclusivity and accessibility for users from diverse linguistic backgrounds.

This feature allows customers to use the app, make payments, and access support services in their preferred language, enhancing the user experience and promoting broader app adoption worldwide.

You might also like: How Much Does it Cost to Build a Food Delivery App in 2024?

How to Develop a UPI Payment App?

After we’ve covered everything from some popular UPI apps in the market and benefits of developing a UPI payment app to ways to generate revenues through a wallet app and what features you must add in your app to achieve the max, we’re now finally on our main topic, how you can get started with developing a UPI app?

Below, you will find a step-by-step process that you can follow to create a solution that can be named among the best UPI-based payment apps.

Step 1. Understand the Basics

Whether you want to build a UPI application or any other type of eWallet, understanding the fundamentals is critical. In other words, the UPI app development process starts with learning the basic rules in the universe of the Unified Payments Interface (UPI).

Understanding the intricacies of digital transactions is crucial. Explore the mechanisms of encryption, the nuances of transaction protocols, and the significant role that banking institutions play in facilitating this digital symphony of financial exchanges.

Step 2. Market Research

Once you understand how UPI works, you need to analyze your target audience and monitor your competitors closely.

Investigate what UPI features to attract users towards payment applications and discover the innovative functionalities that set some apps apart. In short, conduct app market research. This will help you create an app that resonates well with your intended audience.

Step 3. Conceptualize the UPI App

It’s time your imagination ran wild, and you devised an app idea for a fintech app solution. Think about what unique features your app will bring to the table.

Will it help users facilitate transactions solely, or will it allow them to manage bills, order food, and offer additional utilities like weather forecasts?

Sketch out your vision and allow your creative and innovative ideas to guide the formation of your UPI app’s blueprint.

Step 4. Choose the Technology Stack

The next step when building a UPI payment app like Phone Pay is to choose the technology stack for your project. This stage includes deciding on programming languages,  frameworks, and tools that will form the backbone of your app.

With the help of a reputable app development company, you can choose technologies that enhance your application’s functionality.

Related Read: What is the Importance of Java Programming Language in 2024?

Step 5. Design User Interface (UI) and User Experience (UX)

Whether it's an application or a custom website, UI/UX plays a vital role in the success of the project. Thus, focus on creating a UPI system design that is as intuitive as inviting.

The goal is to build a unified payment interface app that can be effortlessly navigated by users of all ages, including those who are not tech-savvy.

Draft the layout of your app's screens with clarity and simplicity in mind, ensuring that every component, from buttons to menus, enhances the user experience and interaction.

Also, remember that to create a UPI Wallet App design that captures customers, it must be simple and easy to navigate.

You can take inspiration from the official Android and iOS app designs or consult the app and web designers who can help you craft an interface that meets your expectations.

Step 6. Security Implementation

As we've mentioned before in this guide, when discussing a fintech solution like the UPI payment app, security is paramount and should thus be your top priority.

For this, you can adopt a vigilant approach to safeguarding user data, employing through encryption methods to ensure that sensitive information is securely transmitted and accessed only by authorised parties.

Consider adding multi-factor authentication to add an extra layer of security, protecting your users against potential threats.

Step 7. Integration with Banks

This step involves partnering with banking institutions to ensure smooth interoperability between their services and your application.

Understanding banks' technical and regulatory requirements is crucial to allowing users to do money transfer processes quickly and safely.

Step 8. NFC/QR Code Integration

If you know anything about UPI apps, you know that they thrive on contactless payment technology. QR codes or NFC payment technology can be utilized as an efficient and user-friendly means of executing transactions.

Integrating these payment capabilities enables users to make payments swiftly and effortlessly, enhancing the overall user experience and streamlining the payment process.

Step 9. Testing

With all said and done, it's time for your iOS app development team to test the app. It's ideal to adopt a thorough testing mindset, scrutinising your application for flaws or bugs.

Test the app under various conditions to ensure its reliability and robustness, addressing any issues to ensure the application is ready for real-world use.

Step 10. Compliance and Regulations

When developing a UPI payment app, remember to consider compliance. Once you navigate the complex landscape of financial regulations, ensure your application follows all relevant laws and guidelines.

This meticulous attention to compliance will safeguard your operation and build trust with your users and stakeholders.

Step 11. Launch

It’s finally time you celebrate your hard work and dedication by launching your application.

Now, there are three ways you can launch your UPI app:

  • Launch the iOS app on the App Store
  • Deploy the app on the Android Google Play Store
  • Or both if you are going for hybrid development.

Once submitted, it generally takes at most two weeks for the app to get approved or denied.

After your app is approved and everything is done, you can start with a mobile app marketing plan to spread the word, leveraging social media, blogs, and video content to announce the arrival of your innovative payment solution to the world.

Must Read: The Latest Top Emerging Trends in Marketing in 2024

How Arramton Can Help You Build a Scalable and Secure UPI App

Creating a successful UPI payment app requires careful consideration of regulatory compliance, security standards, and app development expertise. Thus, it is essential to work with a reliable FinTech app development company that has previously worked on similar projects to ensure the success of UPI apps.

This is where Arramton Infotech is an ideal option for businesses that want to develop UPI applications.

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

We only use cutting-edge technologies, best coding practices, and the latest industry insights for UPI integration and development. If you're interested in learning more about how we can build a UPI app for you, Contact Arramton today!

Frequently Asked Questions

Q. Do UPI apps make money?

Ans. Yes, UPI apps generate revenue through various means like commissions from partnerships with brands and financial institutions, subscription fees for business payment solutions, anonymized data monetization, and value-added services like bill payments and recharge.

Q. How to create an app like Google Pay?

Ans. Developing a UPI app like Google Pay requires expertise in mobile app development and adhering to NPCI's regulations. While the core functionalities resemble Google Pay, features and design will depend on your target audience and unique offerings.

Q. Which is India's No.. 1 UPI payment app?

Ans. Determining the No. 1 UPI payment app is difficult as popularity can fluctuate. However, the most used UPI apps in India include Google Pay, PhonePe, Paytm, and BHIM, each with a large user base.

Q. How much does it cost to make the UPI app?

Ans. The cost of developing a UPI app in India can vary significantly (₹24 lakhs to ₹2.4 crore) depending on features, development team location, and technology stack.

Q. Who is the owner of NPCI?

Ans. National Payments Corporation of India (NPCI) is not owned by a single entity. It's a non-profit organization governed by a consortium of leading banks in India, including the Reserve Bank of India (RBI).

Q. How to create a UPI payment gateway?

Ans. NPCI regulates UPI and doesn't allow individual entities to create UPI gateways directly. However, you can integrate existing UPI payment gateways offered by NPCI-approved partners into your app for users to make UPI payments.

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