RBI launched UPI payment system (Unified Payments Interface ) Payment system to make Indian banking payment system smarter.In a bid to revolutionise the e-banking system of India, the Reserve Bank of India governor Raghuram Rajan and the National Payments Corporation of India (NPCI) has launched a Unified Payments Interface (UPI) in the form of a mobile app, which will make monetary transactions simple and faster. All you will need is a smartphone. This app can be used for the transaction of any amount of money below Rs 1 lakh, that can be something as low as Rs 50.
NPCI says that Federal bank , Axis Bank , RBL, Yes, Oriental Bank of Commerce , Union Bank , ICICI Bank, HDFC Bank, PNB and Canara Bank are ready with their apps. Ten others have also signed up to join. As one can see, even those banks with wallets have joined in. Clearly these banks want to stave off the competition that is likely from the payment banks as well.
“Today a few banks have gone live with UPI out of 29 banks that had concurred to provide UPI service to their customers. We are confident that several banks will join UPI this year and the number will multiply further. Our focus is in line with RBI‟s vision of migrating towards a „less-cash‟ and more digital society. NPCI has always been at the forefront to innovate and introduce new products and services at par with global standards,” said Mr. A. P. Hota, MD & CEO, NPCI.
What is UPI payment system (Unified Payments Interface )?
UPI is a unique payment solution as the recipient is now empowered to initiate the payment request from a smartphone. It facilitates „virtual address‟ as a payment identifier for sending and collecting money and works on single click 2 factor authentication. It also provides an option for scheduling push and pull transactions for various purposes like sharing bills among peers. One can use UPI app instead of paying cash on delivery on receipt of product from online shopping websites and can perform miscellaneous expenses like paying utility bills, over the counter payments, barcode (scan and pay) based payments, donations, school fees and other such unique and innovative use cases. The interface is the advanced version of NPCI‟s Immediate Payment Service (IMPS) which is a 24*7*365 funds transfer service. UPI will offer a facility to identify a bank customer with an email-like virtual address. It will allow a customer to have multiple virtual addresses for multiple accounts in various banks. In order to ensure
The interface is the advanced version of NPCI‟s Immediate Payment Service (IMPS) which is a 24*7*365 funds transfer service. UPI will offer a facility to identify a bank customer with an email-like virtual address. It will allow a customer to have multiple virtual addresses for multiple accounts in various banks. In order to ensure privacy of customer‟s data, there is no account number mapper anywhere other than the customer’s own bank. This allows the customer to freely share the financial address with others. A customer can also decide to use the mobile number as the name instead of the short name for the virtual address like 1234567890@sbi.
What is the use of UPI payment system?
If you have a bank account, you need to download the UPI app of a bank from Google PlayStore.
You have to register your bank account and then you will have to create a unique ID, then a mobile pin will be generated. You can also link your Aadhaar number.
While making payments, select the amount you have to pay, add the unique ID of the recipient. Then you have to select ‘send’. The app will ask for a mobile pin to authenticate the payment after which it is done.
With the advancement of the digital system and the growth in the number of mobile banking users, the RBI and NPCI are taking these initiatives to minimise cash transactions.
How will UPI Payment system ease Indian Payment system?
This app will be very effective for making third-party payments. Today, if you have to pay money to someone else, you will need their account number, IFSC code, branch detail etc and you also have to add that person as a beneficiary. With the help of the UPI app, you don’t require any of that. All you will need is the receiver’s unique ID. You can share money with anyone with this app directly from account to account, without using cash.
Also, you can use the app for making e-commerce payments and cash on delivery payments. After receiving the product you will need the firm’s unique ID and make the payment instantly.
Another great feature of the UPI is that you don’t need any specific bank’s account to be able to make transactions. You can use any bank’s UPI system to transfer money or make payments.
Which other apps function same like UPI Payment system or competitor of UPI?
Currently, the various wallets such as Paytm, HDFC Bank ’s chiller, ICICI Bank ‘s pockets and SBI ’s buddy do much the same. But, they are small islands of people who are registered with the same bank’s wallet. Once UPI is up and we all have our IDs in place, wallets won’t be needed. UPI incidentally doesn’t allow interoperability of wallets on its platform. So wallets probably will die away like the good old pager unless they can re-invent themselves in some fashion. But they get a lead time. Today, wallets are a craze because of their simplicity and ease of use. UPI’s apps may take time. One hears that some of the banks which have signed up with UPI have already launched apps which are temptingly easy to use. But one needs to see how the UPI platform itself works. A project as massive as this one may have its fair share of hiccups. Even as he was launching the UPI, the governor warned that a resolution system needs to be put in place for the user to recover her money if a transaction fails. So as of now we may prefer to pay our Ola cabs for a few more months with our wallets.