UPI A New System For Cashless Payments
Reserve Bank of India in partnership with 10 other banks released the first Unified Payments Interface (UPI) app. Using this, meteoric rise of smartphone users and bank account holders in the country, payments will become comparatively easier from the bank to anyone else.In order to tackle the growing problems of cash, card, and cheque payments around the country, the National Payments Corporation of India (NPCI) along with the direction of Reserve Bank of India (RBI) Governor Raghuram Rajan have devised a new Unified Payments Interface (UPI).
Basic Features of UPI:
- It allows banks and other players to innovate and offer a superior customer experience to make electronic payments convenient and secure.
- Supports the growth of e-commerce, while simultaneously meeting the target of financial inclusion.
- The UPI is expected to further propel easy instant payments via mobile, web, and other applications.
- The payments can be both sender (payer) and receiver (payee) initiated and are carried out in a secure, convenient, and integrated fashion.
- This design provides an ecosystem driven scalable architecture and a set of APIs taking full advantage of mass adoption of smartphone.
- Capabilities include virtual payment addresses, 1-click 2-factor authentication, Aadhaar integration, and use of payer’s smartphone for secure credential capture.
- It allows banks and other players to innovate and offer a superior customer experience to make electronic payments convenient and secure.
- Supports the growth of e-commerce, while simultaneously meeting the target of financial inclusion.
What is Unified Payment Interface (UPI) ?
It is a payment system that will allow you to use a mobile phone to make money transfers. A virtual debit card, if you will.
What is the difference between UPI from other banking apps?
Every bank requires you to download its app. So, if you have two bank accounts, you will find yourself needing two apps on your smartphone. But, with this interface, the customer needs to download only one app. The UPI interface will network all the banks together and make it possible for the customer to make her transactions using a single app.
Do I need to disclose my bank account details for UPI?
It is said that using UPI, customers can create a unique financial identity that would be linked to the bank account at the back end of the bank. So, for making transactions, you, as a customer, would need to share only this identity and not your bank account details for making payments or transactions. Using the unique identity, NPCI would direct the transaction to the linked bank account and the bank would apply the relevant transaction at its end.
How transactions happened in UPI?
Transactions on websites, especially shopping sites were multiple layer connections that exist between the shopping site, payment gateway and the bank. UPI seeks to make the connections simpler and quicker so that the process becomes more efficient and shoppers can make instant payments.
While making the payment, the customers have to select the bank account, type in the amount to be paid, enter the recipient’s unique ID, and click on send. A mobile PIN will be generated to authenticate the payment and it will be done.
Working of Unified Payment Interface (UPI):
