Change the way you pay with Unified Payments Interface

Change the way you pay with

Unified Payments Interface

Reserve Bank of India Governor Raghuram Rajan

launched the Unified Payments Interface (UPI) system on

Monday, as its latest offering in boosting digital money

transfers.

The interface has been developed by National Payments

Corporation of India (NPCI), the umbrella organisation for

all retail payments in the country. The UPI seeks to make

money transfers easy, quick and hassle free.

Ten major banks — SBI, Canara Bank, BOI, ICICI Bank, HDFC Bank,

Punjab National Bank, Bank of Baroda, HSBC, and Citi Bank — are

integrating the interface with their mobile apps. “29 banks had concurred

to provide UPI service to their customers. We are confident that several

banks will join UPI this year and the number will multiply further,” said A.

P. Hota, MD & CEO, NPCI.

Traditional e-payment methods Unified Payment Interface App Free

Most electronic payments in India is facilitated through NEFT and RTGS.

In National Electronic Funds Transfer (NEFT), money transfers are made

via electronic messages. The bank details of the sender and the beneficiary

are linked using bank branch name and IFSC code. When a payment is

initiated, the payer’s bank sends a ‘message’ to its NEFT service centre. All

such messages are pooled every hour and the bank’s NEFT centre sends it

to the RBI, which initiates the transfer. The process typically takes a little

more than an hour and is available only during the bank’s working hours.

Unlike NEFT, in Real Time Gross Settlement (RTGS), fund transfers

handled on one-to-one basis. Large value transactions, typically over Rs.

2 lakhs, are carried out using this method. This is also done during

working hours.

Immediate Payment Service (IMPS) is a more recent form of fund

transfer that is gaining popularity. A user is given a 7-digit Mobile

Money Identifier (MMID) Code. The sender initiates payment using

mobile bank by giving the MMID code and registered mobile number of

the beneficiary. Most banks offer this service free-of-cost now. It is a

round-the-clock immediate payment service.

How does UPI work

Imagine buying grocery from a supermarket by paying cash. You

handover the cash, the biller hands you a receipt and the purchased good.

UPI is as simple as this. Instead of handing over the cash, you tell your

virtual identity to the cashier. The cashier generates an invoice through

UPI, you approve it using your mobile phone and the payment is made!

The Unified Payment Interface App Free is an improved version of IMPS.

Apart from a bank account, all that you need is a smartphone. Once you

register for UPI with your bank, a unique ‘virtual address’ will be created.

This is mapped with your mobile phone.

To initiate the payment, UPI invokes this virtual identity of the

beneficiary and transfers money in real-time. It works on single-click

2-factor authentication.

UPI will allow a customer to have multiple virtual addresses for

multiple accounts in various banks. In order to ensure privacy of

customer’s data, there is no account number mapper anywhere other

than the customer's own bank. This allows the customer to freely

share the financial address with others.

A customer can also decide to use the mobile number or Aadhaar

number as the name instead of the short name for the virtual address.

UPI can potentially eliminate the need for maintaining a mobile

wallet, as this ‘virtual address’ is not limited only to individuals. This is

a significant step towards moving into a cashless economy.

Source: http://bit.ly/2iEHUBI