Unified Payments Interface
This article may need to be rewritten to comply with Wikipedia's quality standards. (November 2020)
This article needs to be updated.(November 2020)
|Product type||instant real-time inter-bank payment system|
|Owner||National Payments Corporation of India|
|Introduced||11 April 2016|
Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India facilitating inter-bank transactions. The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform. As of December 2020, there are 207 banks available on UPI with a monthly volume of 2334.16 million transactions and a value of ₹4,161.762 billion (US$58 billion) UPI witnessed 2,210.23 crore transactions till November 2020. The mobile-only payment system helped transact a total of ₹17.29 lakh crore (US$240 billion) during the 37 months of operation starting from 2016. As of May 2021, the platform has 100 million monthly active users in India with plans to achieve 500 million by 2025. IIT Madras is also working to integrate voice command feature that can support English and Indian vernacular language in future.
In April 2009 with the objective to integrate all the payment mechanism available in the country and make it uniform for retail payments, National Payment Corporation of India (NPCI) was formed. By March 2011, RBI found out that in India only six non cash transactions happens every year per individual citizen while 10 million retailers accept card based payment. Around 145 million families have no access to any form of banking. There is also the problem to tackle black money and corruption that happens mostly in cash.
RBI in 2012 released a vision statement for a period of four years that indicated commitment towards building a safe, efficient, accessible, inclusive, interoperable and authorized payment and settlement system in India. It is part of the Green Initiative to decrease the usage of paper in domestic payments market.
Under RBI guidance, NPCI became the primary body with the task to develop a new payment system that is simple, secure and interoperable. As per CEO of Netmagic Solutions, UPI became one of the most successful deep tech innovation coming out of India.
Unified Payments Interface is a real time payment system that allows sending or requesting money from one bank account to another. Any UPI client app may be used and multiple bank accounts may be linked to single app. Money can be sent or requested with the following methods:
- Virtual Payment Address (VPA) or UPI ID: Send or request money from/to bank account mapped using VPA.
- Mobile number: Send or request money from/to the bank account mapped using mobile number.
- Account number & IFSC: Send money to the bank account.
- Aadhaar: Send money to the bank account mapped using Aadhaar number.
- QR code: Send money by QR code which has enclosed VPA, Account number and IFSC or Mobile number.
Any UPI app can use payment and transfer fund from and to UPI enabled banks.
Below is a list of some popular UPI mobile applications.
On 16 August 2018, UPI 2.0 was launched which enabled users to link their Overdraft accounts to a UPI handle. Users were also able to pre-authorise transactions by issuing a mandate for specific merchant. 2.0 version included a feature to view and store the invoice for the transactions. There's also an added feature of AutoPay facility for recurring payments.
The website of National Payments Corporation of India (NPCI) lists the banks that facilitate UPI. Banks here are termed as Payment Service Providers (PSP) - listed with their UPI application and handle - and issuers. PSP includes those banks which have their own mobile application to facilitate transaction and issuers include banks which don't have their payments interface and rely on third party software for transaction using UPI.
There are talks happening to operate UPI in United Arab Emirates and Singapore which has sizeable Indian expatriates and for ease of payment for Indian tourists travelling abroad. Committee on digital payments led by Nandan Nilekani had suggested that NPCI should internationalise payment services like UPI, RuPay and BHIM. NPCI is planning to link UPI with standalone mobile wallets so that users can transfer money from one provider to another one which till now is restricted due to use of closed source technology. There is also provision for off-line UPI payment through the use of near field communication (NFC).
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- UPI 3rd Party Apps NPCI
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