THE chaos caused by India’s ban on high denomination rupee notes has provided a boost to a national cashless payment platform that has struggled to gain traction.

    Usage of the government-backed Unified Payments Interface (UPI) has surged, with more than 250,000 transactions in the first week of December, close to November’s total of 287,000, central bank data show, as some Indians seek to circumvent the cash shortage that followed the government’s surprise graft-busting move Nov. 8.

    Prime Minister Narendra Modi’s action to invalidate old 500 and 1,000-rupee notes left India with about a fifth of its currency in circulation and caused a scramble for cash that has seen millions lining up at banks daily to deposit the notes or exchange them for new denominations. That’s pushed more people toward the UPI, which has been slow to take off amid criticism that banks are not promoting the service enough.

    “For the customer and consumer, it is cheaper and easier to use UPI than most other ways of payments like cards,” said Stuart Milne, chief executive officer for HSBC Holdings’ India operations. The platform is “beneficial to both customers and merchants,” he said.

    The Reserve Bank of India’s UPI transactions data for November and December are the earliest available usage figures for a platform that was unveiled in April. Partner banks’ mobile applications only went live officially in August.

    Launched as part of the country’s bold push to yank its cash-based economy into the 21st century, the UPI allows users to make transactions over their mobile phones including cash transfers to other users, and payments to utilities and some merchants.

    Anyone with a smartphone, an account at one of the UPI’s partner banks and a mobile number linked to that account can download the platform app. Users are enabled after registering on the app, which usually takes less than five minutes.

    Still, the UPI has drawn criticism from a number of commentators who say that education for potential users is lacking and the platform’s partner banks aren’t doing enough to promote it.

    The system has attracted 2 million registered users, according to A.P. Hota, CEO of the National Payments Corp. of India, which manages the UPI. (SD-Agencies)