UPI set to make online and mobile transactions easier
The way money transactions in India take place set to change severely with the introduction of Unified Payment Interface (UPI), which intends to move the country towards a more cashless model. It has been developed by the National Payment Corporation of India (NPCI) and is expected to change the face of mobile banking
The way money transactions in India are taking place is all set to change extensively with the introduction of Unified Payment Interface (UPI), which intends to move the country towards a cashless model. It has been developed by the National Payment Corporation of India (NPCI), and is expected to change the face of mobile banking.
The Reserve Bank of India (RBI) in its Payment System Vision Document (2012-2015) had mentioned the use of UPI for attaining its objective of a lower cash-intensive society and financial inclusion of the latest technology.
UPI (Unified Payment Interface) is a gateway built on IMPS (Immediate Payment Service) to enable online payments. It aims to provide anyone with a bank account to create a number of virtual payment addresses in an easy and swift manner, and use them to make or receive payments and funds.
It includes features like push and pull payments - initiated by both sender and receiver, easy instant payment via mobile, web, and other applications. Other features include 1 Click 2FA (Two-Factor Authentication) and combination of virtual address. This will also permit customers to transfer or receive funds using Aadhar number.
With this, customers will have the ease of accessing any bank application that has been certified by NPCI, and create a virtual payment address for any bank account. Multiple bank accounts can be linked to this virtual address.
“A customer can create a virtual address from Bank A’s app, link Bank B’s account & make payment to any virtual address or bank account or merchant. Similarly, the receiver can have Bank C’s app but receive money in Bank D’s account. It’s a 4 party inter-operable model,” explains Nitin Misra, Vice President at Paytm.
Misra states, “For Paytm wallet, it’s a more cost effective method of adding funds compared to other payment instruments. UPI will bring more bank customers who don’t transact online to transact online. This will expand the universe of Paytm customers across its products. These customers will not only transact using Paytm wallet across thousands of online & offline merchants for payments but also shop for digital & physical goods on Paytm marketplace.”
Paytm also plans to drive creation of UPI through their app, post the launch of Paytm Bank. It will allow its user base of 125 million and growing to have a virtual address with an @paytm alias. This will allow Paytm customers to make payments at any point where Paytm is currently not accepted.
FreeCharge’s COO, Govind Rajan added, “UPI enables a simplified interface. A simple User Interface (UI) is an article of faith for us. Over 99% of FreeCharge's transactions are done within 10 seconds. Consumers love our UI and this is reflected in the fact that we are India's fastest growing wallet. As UPI comes into being we are confident that on the rails of UPI we will be able to enable a faster and more secure transaction across merchants.”
With most banks expected to be on UPI quite soon, digital transactions will get a huge leg up since the system is bank agnostic. The Indian banking sector may look at UPI as a disruptive revolution that will take its service distribution to the next level while facilitating financial inclusion in a single stroke, and push for implementing this technology with urgency.For more updates, be socially connected with us on
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