Detailed Explanation:

Answer: Option 1 — Mobile wallets will not be necessary for online payments.

The Unified Payments Interface (UPI) is a real-time payment system that enables instant bank-to-bank transfers directly through mobile applications without requiring intermediate instruments like mobile wallets. By allowing users to make payments directly from their bank accounts, UPI eliminates the need to first load money into a separate wallet for online transactions.

✅ Statement 1 – Correct: UPI enables direct bank-to-bank transfers through mobile apps, removing the need for intermediate mobile wallets as users can pay directly from their bank accounts.

❌ Statement 2 – Incorrect: While UPI promotes digital transactions and financial inclusion, it will not completely replace physical currency in about two decades as cash continues to play a significant role in the Indian economy, especially in rural areas and for small transactions.

❌ Statement 3 – Incorrect: UPI is a domestic payment infrastructure designed for retail payments and has no direct causal relationship with Foreign Direct Investment (FDI) inflows, which depend on factors like economic policies, business environment, and regulatory framework.

❌ Statement 4 – Incorrect: Direct Benefit Transfer (DBT) schemes primarily use Aadhaar-linked bank accounts and NEFT/RTGS systems for subsidy distribution, not UPI, though UPI may facilitate some secondary transactions.