Unified Payments Interface (UPI) – The Digital Banking Revolution

4 min read

Unified Payments Interface is the brainchild of the National Payments Corporation of India (NPCI). As of today, UPI is the most powerful Banking tool witnessing more than a billion transactions in a month overtaking Netbanking and Plastic Cards.

UPI is a system that powers multiple bank accounts into a single mobile application of any participating bank, merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.

UPI is Unique. Here’s How?

  • Instant money transfer through mobile devices round the clock.
  • A single mobile application to accessing different bank accounts.
  • Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment.
  • A virtual address of the customer for Pull & Push provides for incremental security with the customer not required to enter the details such as Card no, Account number; IFSC, etc.
  • Bill Sharing with friends.
  • The best answer to Cash on Delivery hassle, running to an ATM or rendering the exact amount.
  • Merchant Payment with Single Application or In-App Payments.
  • Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based payments.
  • Donations, Collections, Disbursements Scalable.
  • Raising a Complaint from Mobile App directly.

Participants of UPI

  • Payer
  • Payee
  • Remitter Bank
  • Beneficiary Bank
  • NPCI
  • Bank Account holders
  • Merchants

Who benefits from UPI?

Benefits for end Customers

  • Round the clock availability 24×7, 365 days.
  • Single Application to access different bank accounts.
  • The use of Virtual ID is more secure, with no account details sharing.
  • Single click authentication.
  • Raise Complaint from Mobile App directly.

Benefits for banks

  • Single click Two Factor authentication.
  • Universal Application for the transaction.
  • Leveraging existing infrastructure.
  • Safer, Secured and Innovative.
  • Payment basis Single/ Unique Identifier.
  • Enable seamless merchant transactions.

Benefits for Merchants

  • Seamless fund collection from customers – single identifiers.
  • No risk of storing customer’s virtual addresses like in Cards.
  • Tap customers not having credit/debit cards.
  • Suitable for e-Com & m-Com transaction.
  • Resolves the COD collection problem.
  • Single click 2FA facility to the customer – seamless Pull.
  • In-App Payments

UPI Participants facts

  • 141 Public Sector banks, Private banks, Payment banks, and co-operative banks provide live UPI support to its account holders.
  • Paytm, PhonePe and Google Pay are the key players in the Fintech Sector supporting UPI Interface and accounting to more than a billion transactions a month combined.
  • UPI transactions are more than Netbanking and Plastic Cards.

Source: National Payments Corporation of India

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