After UPI was launched at the Eiffel Tower during Republic Day, it became very popular worldwide. It’s a fast and secure way to transfer money digitally, introduced by NPCI, RBI, and IBA in 2016. Initially, only a few banks used it, but soon many banks worldwide adopted it.

UPI lets you do various transactions instantly on your phone, like transferring money, paying bills, and booking tickets. It’s becoming the norm in today’s digital world, replacing cash and cards.

As of January 2024, there have been 12.20 billion UPI transactions.

Businesses are now interested in making UPI payment apps. While exact costs depend on various factors, estimates for developing a basic UPI payment app in 2024 range from $30,000 to $100,000. More complex apps with advanced features can reach $300,000 or even higher.

UPI Market Growth Statistics

Before we talk about how much it costs to develop a UPI payment app, let’s check out some cool facts about how much UPI is growing worldwide. This will help you decide if making a UPI app is a good idea.

• People are using UPI more and more. It’s expected that by 2027, there will be a billion UPI transactions every day!
• In January 2018, there were 151 million UPI transactions. But by September 2023, that number shot up to 10.56 billion!
• As of January 2024, UPI transactions reached a record high of ₹18.41 trillion, representing a 1% increase from December 2023 and a 42% increase year-over-year compared to January 2023.
• Lots of countries, like the US, Nepal, Bhutan, France, Singapore, Sri Lanka, UAE, Australia, Canada, Hong Kong, the UK, and Europe, are using India’s UPI services for quick transactions. 
• Compared to January 2023, the transaction value in January 2024 grew by 42%, and the volume by 52%.
• Right now, there are 484 banks around the world using UPI, and big companies like Google Pay, PhonePe, Amazon Pay, and Paytm are also part of the system.

Benefits of UPI Payment App Development

Developing a UPI payment app comes with many advantages for businesses, merchants, and users alike. Here are some of the main benefits:

User Convenience: UPI apps offer a simple and easy way for users to pay bills and transfer money whenever they want, wherever they are, using their smartphones or other digital gadgets. This means no more need to carry around cash or cards or visit a physical bank.

Security: UPI apps use advanced encryption and double-factor authentication (2FA) to make sure that transactions are secure. With features like biometric authentication, UPI PIN, MPIN, and tokenization, users can be confident that their financial information is safe from unauthorized access or fraud.

Speed: UPI enables instant transfers of funds between bank accounts, which means transactions are settled in real-time. This helps to speed up cash flow, reduce payment processing times, and make financial transactions more efficient overall.

Interoperability: UPI apps allow users to transact with anyone, whether they’re individuals or businesses, regardless of their bank or where they are located. This makes UPI a convenient option for digital transactions, offering flexibility and ease of use.

Scalability and Customization: Businesses can scale and customize their UPI apps to meet the changing needs and preferences of users. By adding new features, services, and integrations, businesses can make their apps stand out in the market and stay competitive.

The Security of UPI Apps and Transactions

UPI apps and transactions prioritize security by implementing stringent measures and following regulatory standards to safeguard user data and prevent fraud. Here are some important guidelines, regulations, and compliances to consider for UPI app development:

1. RBI Guidelines: UPI apps must follow RBI guidelines concerning transaction limits, customer authentication, fund settlement, and dispute resolution.
2. NPCI Guidelines: Compliance with NPCI guidelines ensures the interoperability, reliability, and security of UPI transactions across different platforms.
3. Data Protection Laws: UPI apps need to adhere to data protection laws like GDPR in the EU and PDPB in India to safeguard users’ sensitive information.
4. PCI DSS: Compliance with PCI DSS is necessary to securely process debit and credit card information and prevent data breaches.
5. AML and KYC Regulations: Adhering to AML and KYC regulations helps prevent money laundering and fraud by verifying users’ identities through government-issued documents.
6. Accessibility Standards: Following accessibility standards such as WCAG ensures that UPI apps are usable by individuals with diverse needs, including those with disabilities.
7. Best Security Practices: Implementing robust security measures like 2FA, data encryption, regular security audits, and vulnerability assessments enhances transaction security and ensures compliance with regulations.
8. NPCI Certification: UPI app developers must undergo NPCI certification processes to validate required compliances and standards for interoperability and security.

The Future of UPI Security

Expect to see these developments in UPI security in the coming years:

• More Biometric Authentication: Increased use of fingerprint, facial, and other biometric security.
• AI-Powered Fraud Detection: Artificial intelligence will play a larger role in identifying fraudulent patterns of behavior.
• User Education: Ongoing initiatives to educate users about safe UPI practices remain crucial.

By adhering to these industry regulations and compliances, businesses can maintain the seamless performance of their UPI apps while ensuring the security and privacy of users’ data.

Factors Influencing UPI Payment App Development Costs

To give you an idea, developing a UPI payment app can cost anywhere between $25,000 and $250,000, but several factors influence these costs. Let’s break down these factors:

App Complexity and Features: The complexity and feature list of the app directly impact development costs. Basic features like account linking and fund transfers are cheaper to implement, while advanced features like bill payments and biometric authentication increase costs.

• Simple app with basic features: $30,000 to $60,000, 4 to 6 months.
• Moderate app with essential features: $60,000 to $120,000, 6 to 10 months.
• Advanced UPI 2.0 app with ultra-advanced features: $120,000 to $300,000, 10+ months.

A well-designed interface enhances user engagement but also adds to development costs.

1. Platform Compatibility: Developing for multiple platforms like iOS, Android, and web browsers increases complexity and costs.
2. Third-Party Integrations: Integrating with banks’ APIs and payment gateways adds complexity and time to development.
3. Security Measures: Implementing security features incurs additional costs to protect user data.
4. Regulatory Compliance: Complying with data protection laws and payment processing protocols adds expenses.
5. Location of Developers: Hiring developers from regions with higher living costs like the US or Western Europe is more expensive compared to regions with lower labor costs like India or Southeast Asia.
6. Choice of Tech Stack: The technology used in development affects costs. Opting for widely used technologies may reduce costs.
7. For example:

Hourly rate in the US: $95-$100
Hourly rate in Asia: $25-$40

Here’s an estimation of tech stack costs:

• APIs: $5000-$8000
• Frameworks: $6000-$9000
• Programming Languages: $7000-$12000
• Database: $8000-$12000
  
• Operating System: $10000-$14000
• AI and other technologies: $10000-$20000
• Cloud storage: $12000-$15000

Considering these factors will help in estimating the cost of developing a UPI payment app more accurately.

Must-Have Features in a UPI Payment App

When developing a UPI payment app, it’s crucial to prioritize user experience and sustainability. Here are some essential features, inspired by successful apps like Paytm, Google Pay, and Amazon Pay, that contribute to both secure and eco-friendly practices:

1. Core Functionalities:

• Seamless account linking and UPI PIN creation: A smooth onboarding process with easy linking of multiple bank accounts and a secure way to create and manage UPI PINs is crucial.
• Multiple payment methods: Offer various options like sending/receiving money using UPI IDs, QR codes, or bank details, catering to different user preferences.
• Comprehensive transaction history: Provide a detailed history of all transactions, including date, time, amount, recipient information, and category for easy expense tracking and budgeting.

2. Enhanced Security:

• Multi-factor authentication (MFA): Implement robust MFA using a combination of passwords, biometric authentication (fingerprint, facial recognition), and OTPs for added security.
• Fraud detection and prevention: Utilize advanced algorithms and real-time transaction monitoring to identify and prevent fraudulent activities.
• Secure in-app communication: Encrypt all communication within the app to protect sensitive data from unauthorized access.

3. Convenience and Value-Added Services:

• Bill payments and recharges: Allow users to pay bills for utilities, mobile recharge, and other services directly through the app, simplifying bill management.
• Split bills and group payments: Facilitate convenient splitting of bills and group payments among friends and family, saving time and effort.
• Investments and financial management tools: Integrate features like investment options, expense management tools, and budgeting trackers to help users manage their finances holistically.

4. Additional Features for Differentiation:

• Offers and cashback programs: Partner with merchants and offer exclusive deals, cashback, and loyalty programs to attract and retain users.
• AI-powered chat support: Provide instant and personalized assistance through AI-powered chatbots, offering quick solutions to user queries.
• Multi-lingual support: Cater to a wider audience by offering the app interface and support in multiple languages.

UPI Payment App Development Process

As mentioned earlier, more and more countries are starting to use UPI payment systems, which is making the UPI market grow really fast. Because of this trend, businesses are starting to make their own UPI apps. But making a UPI app is hard and tricky. You need help from a company that knows how to develop UPI apps well.

Developing a UPI wallet app involves many steps. First, you need to study the market carefully. Then, you plan out the project and design how the app will look and work. After that, you add all the features smoothly, test everything really carefully, and keep the app updated and working well over time.

Build Secure and Scalable UPI Apps with Gsquare

Developing a UPI payment app involves making sure it follows all the rules and regulations, keeps user information safe, and provides a good experience for users. That’s why it’s important to work with a trusted company like Gsquare, which has experience in building apps that meet standards like GDPR and PCI-DSS.

Gsquare has a strong track record, having completed over 2500 successful projects. We have a big team of experts who know how to use the latest technology and follow the best practices to make sure UPI apps are secure and easy to use.

By working with us, businesses can be confident that their UPI apps will meet all the rules, be safe for users, and help make digital payments more popular worldwide. Let’s work together to create a better future with UPI payment apps.