The way money transactions in India are taking place is all set to change extensively with the introduction of the Unified Payment Interface (UPI), which intends to move the coultry towards a cashless model. It has b.,,en developed by the National Payments Corporation of India (N PC1), and is expected to change the face of mobile banking. UPI is a payment solution that empowers a recipient to initiate the payment request from a smartphone. It facilitates virtual payment address (VPA) as a payment identifier for sending and collecting money and works on single-click two-factor authentication.
The biggest draw for the UPI is its ability to make payments seamless and instant by requiring the payee to only remember a VPA, much like sending an email. UPI has been launched to take forward the RBI's vision of migrating towards a "less-cash" and more digital society. RBI in its Payment System Vision Document (2012-2015) had mentioned the use of UPI for attaining its objective of a lower-cash-intensive society and financial inclusion of the latest technology.
UPI is a gateway built on IMPS (Immediate Payment Service) to enable online payments. It aims to provide anyone with a bank account to create a number of VPAs in an easy and swift manner, and use them to make or receive payments and funds. This will also permit customers to transfer or receive funds using Aadhar number. With this, customers will have the ease of accessing any bank application that has been certified by NPCI, and create a VPA for any bank account. Multiple bank accounts can be linked to this virtual address. The most important aspect of the UPI is its open architecture. The user interface is fully flexible and banks are free to create the most intuitive interface.
The success of the UPI is dependent on the adoption of the platform by all banks. Further, the user needs to have a smartphone to make transfer and hence. the potential us base will be restricted to around 24 mn people currently. On the acquirint front, there needs to be an aggressivt push from payment service providers (PSPs) to maximise newer merchant to popularise UPI as a payment option India continues to have low ad' card penetration and low debit ca activation leading to a poor reach of electronic payments — still in single digits. With debit cards mostly used al ATMs to withdraw cash, it is clear thA they are being used more like substitute for cash than as a true payment instrument. UPI could be that master stroke that turns the tide ie favour of electronic payments in India. In the future, we mtly see a burst of new technologies in the form of contactless payments, host card emulation technology, and tokenisation that can make payment'. simple for consumers withou compromising security.
The biggest draw for the UPI is its ability to make payments seamless and instant by requiring the payee to only remember a VPA, much like sending an email. UPI has been launched to take forward the RBI's vision of migrating towards a "less-cash" and more digital society. RBI in its Payment System Vision Document (2012-2015) had mentioned the use of UPI for attaining its objective of a lower-cash-intensive society and financial inclusion of the latest technology.
UPI is a gateway built on IMPS (Immediate Payment Service) to enable online payments. It aims to provide anyone with a bank account to create a number of VPAs in an easy and swift manner, and use them to make or receive payments and funds. This will also permit customers to transfer or receive funds using Aadhar number. With this, customers will have the ease of accessing any bank application that has been certified by NPCI, and create a VPA for any bank account. Multiple bank accounts can be linked to this virtual address. The most important aspect of the UPI is its open architecture. The user interface is fully flexible and banks are free to create the most intuitive interface.
The success of the UPI is dependent on the adoption of the platform by all banks. Further, the user needs to have a smartphone to make transfer and hence. the potential us base will be restricted to around 24 mn people currently. On the acquirint front, there needs to be an aggressivt push from payment service providers (PSPs) to maximise newer merchant to popularise UPI as a payment option India continues to have low ad' card penetration and low debit ca activation leading to a poor reach of electronic payments — still in single digits. With debit cards mostly used al ATMs to withdraw cash, it is clear thA they are being used more like substitute for cash than as a true payment instrument. UPI could be that master stroke that turns the tide ie favour of electronic payments in India. In the future, we mtly see a burst of new technologies in the form of contactless payments, host card emulation technology, and tokenisation that can make payment'. simple for consumers withou compromising security.
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