We have always been big fans of the West when it comes to bringing technology and innovation to any field. We have been following Basel norms for our banking services. The Swift feature for interbank transfers isn’t alien to any banking buddy.
But one thing that has changed the banking industry for the better is the UPI. Not just India but the world itself has witnessed how UPI has brought a revolution when it comes to making payments.
UPI which stands for Unified Payments Interface has made it super easy for customers to make online payments. According to the stats, the number of UPI transactions which stood at a value of around Rs.90 crores in August 2016 touched Rs.480 crores just till December 2016.
To add up more, this figure just crossed a value of Rs.11 lakh crores in September 2022 according to NPCI.
UPI has become an inseparable part of our lives. This can be understood just by asking ourselves-when was the last time we used a debit card to make an online payment!
Now, let’s understand what this UPI is and how it works!
The Unified Payments Interface(UPI) was launched in 2016. UPI was developed by the NPCI(National Payments Corporation Of India) which is a not-for-profit organization. It is an interoperable system of making payments with minimum inputs.
It helps in the integration of multiple bank accounts into a single mobile portal. This helps in enabling interoperability between multiple banks.
The payments are made using a 6-digit UPI PIN. A mobile number, UPI ID, or a QR code can be used to make the required payment. The only requirement is that the bank account needs to be UPI enabled.
The most important point to be remembered while making a UPI payment is that it needs both the sender and the receiver to have a UPI-enabled bank account.
It can be used for a variety of payments like paying for FasTag, groceries, DTH, loan EMIs, etc.
* You need to download a UPI application
* Input your mobile number and bank account details
* Create a UPI id and get your bank account linked to it
* Set up your Mpin
The best thing about Unified Payments Interface is that it doesn’t need loads of information or gadgets to make payments. It just needs a smartphone, an active bank account, an internet connection, and a mobile number that is linked to your bank account.
Since you are now familiar with UPI, you should also know about UPI Autopay. As the name suggests, UPI Autopay helps you in making automatic payments.
Let’s discuss more it in the next section.
Do you also have those grandparents at home who gets angry when you miss to recharge their DTH plan? Of course, they will get angry.No one likes to miss their favorite daily soap opera.
So, to free us up all those day-to-day worries, RBI launched UPI Autopay which lets us automatically pay our dues on a pre-determined date.
UPI Autopay has been developed by NPCI(a not-for-profit organization) and is regulated by RBI.
Following up with consumers for recurrent payments is a constant nuisance. However, UPI AutoPay saves the day by enabling companies to receive automated bill payments by setting a predefined date.
UPI AutoPay enables users to make recurring payments through any UPI application. Customers now have the option to enable e-mandate for recurring purchases, such as EMI payments, cellphones, DTH payments, OTT memberships, insurance, and mutual funds, among other things.
Having appropriate payments sent automatically without any hassle is an added benefit. You are thus always secure, stress-free, and receiving the proper assistance.
Since it gives customers the ability to create, support, amend, stop, and renounce auto charge mandates as needed, this component is safe to use.
Customers can make regular payments using the UPI Autopay in a smart, practical, and secure manner. Customers who use this feature won’t be under any obligation to pay late fees. This element will give UPI, whose usage has been increasing, another boost.
Additional Factor of Authentication (AFA) has been used for this by the Reserve Bank of India. In reality, this regulation was put into place by the RBI to give clients more security. Currently, the bank needs your consent before withdrawing funds from your account. The bank will send you a message for this, and payment will only be made following your approval.
To make a UPI Auto Pay payment at your convenience, you can use any UPI application, such as the BHIM UPI app. Every UPI application has a “Mandate” option that allows you to configure for Daily, Weekly, Monthly, etc. The fact that you can generate it instantaneously and pay for it by the due date is crucial.
It enables users to set up automatic debit for any recurring payments made online. UPI AutoPay is a blessing for both customers and merchants since it enables users to create UPI mandates quickly and have their monthly expenses deducted automatically on preset dates. Similar to customers, retailers benefit from the early payment.
UPI and UPI Autopay have added value to the customers’ lives by enabling them to make payments with utmost ease. But stopping, just at this, is not our economy’s goal.
Recently, the Reserve Bank Of India launched the UPI Lite feature at the Global Fintech Forum,2022. Let’s have a detailed look over UPI Lite in the following section.
It is an on-device wallet mechanism, driven by NPCI, to enable quicker and easier offline payments. You can conduct transactions without cluttering up your passbooks or bank statements. It has a higher success percentage for transactions.
Additionally, UPI Lite is a scalable technology that aids banks in better managing the load on their IT systems. India gains from the speed and convenience of UPI Lite. A UPI pin is not even necessary.
* Download any UPI app
* Enable Upi Lite by adding UPI funds from your savings account to your UPI lite wallet.
* These funds will reside in the common library of the UPI app which provides the on-device wallet service.
* Every time you transact you need to do a secured login to the application. You can either scan a QR, enter a UPI id or a UPI number, or any existing flow on the existing UPI.
* Transactions below 200 can be done via UPI Lite without using a UPI pin.
In order to increase transaction success rates, improve user experience, and move us closer to processing a billion transactions per day on the UPI platform, UPI Lite will lessen the debit strain on the core banking system.
The total cap for UPI Lite digital payment mode on a device’s wallet would always be 2,000 rupees.
UPI has evolved as a game changer in the payments ecosystem. The world has already applauded this giant leap that India has taken toward accessible and dynamic payment infrastructure.
A sky-touching number of 39 billion financial transactions totaling $940 billion were made possible by UPI in 2021, which is around 31% of India’s GDP.RBI is targeting to process a billion transactions a day through UPI in the next five years.
Witnessing the huge success of UPI payments in India, many countries are in the process of adopting UPI in their payments ecosystem.
Nepal has become the first foreign country to adopt UPI. Within a population of three crores,45% of it are a banked community. It has a mobile penetration of about 135% with 65% of the population having smartphones.
Thus, Nepal can leverage the benefits of UPI to strengthen its payment infrastructure.
And that’s not the end, more than ten countries are in the process of adopting UPI-based transactions in their payments ecosystem.
Unified Payments Interface has transformed the complete payments ecosystem in India and is about to change it at the global level too!
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