Unified Payment Interface (UPI) facilitates digital banking. It is a role player in Indian economy with cost effective and innovative features. It is a real-time payment system developed by NPCI for peer-to-peer and person to merchant transactions with any one identifier out of aadhar number, mobile number, QR code or virtual payment address like username@bankname.com without giving any bank details like account number or IFSC code. UPI has made money transfer between bank accounts easy. Financial inclusion actually focus on underprivileged class of society, providing them with basic financial solutions. As they are not aware of banks and their products and if they are aware of, still have no access to bank services since they don’t meet basic requirements for such services. These underprivileged people of society may lack necessary documents such as identity proof or income verification and even they don’t know the importance of these documents. Due to all such hindrances they were unable to use bank credit facilities and rely on unorganized lending sources and are exploited by wealthy landlords under the illusion of financial assistance. After extensive research and planning the Government of India introduced number of programmes like Pradhan Mantri Jan Dhan Yojana (PMJDY), Atal Pension Yojana (APY),Pradhan Mantri Mudra Yojana (PMMY) etc. to address these barriers and provide financial solutions to this section. Financial inclusion by GOI has become incredibly simple, thanks to UPI. In this research paper we will come to know the impact of UPI on financial inclusion. We will also find the hurdles the Government is facing in financial inclusion.