Unified Payment Interface Launched. How It Will...

Unified Payment Interface Launched. How It Will Change Mobile Payments ?

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Unified Payment Interface Launched. How It Will Change Mobile Payments
NDTV Profit Team |

Launching the new platform, RBI Governor Raghuram Rajan (centre) said that it will empower users to perform instant push and pull transactions seamlessly.

The National Payments Corporation of India on Monday launched the Unified Payment Interface (UPI) which may revolutionise mobile banking in the country. The National Payments Corporation of India or NPCI is an umbrella organisation for all retail payments system in India.

“Today a few banks have gone live with UPI out of 29 banks that 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,” NPCI managing director and CEO A P Hota said.

Launching the new platform, RBI Governor Raghuram Rajan said that it will empower users to perform instant push and pull transactions seamlessly.

The biggest benefit of Unified Payment Interface is that it will be a single app for accessing different bank accounts. Anyone who has an account should be able to send and receive money from their mobile phone with just a virtual address, which will not have any bank account details.

“It facilitates ‘virtual address’ as a payment identifier for sending and collecting money,” NPCI said in a statement.

The interface is the advanced version of NPCI’s Immediate Payment Service (IMPS) which is a 24X7 funds transfer service. UPI will offer a facility to identify a bank customer with an email-like virtual address. It 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,” NPCI said.

For example, “a customer can also decide to use the mobile number as the name instead of the short name for the virtual address like [email protected]

If you want to settle a bill with a vendor, you just have to give your virtual address ([email protected], for example). Once you authenticate the transaction through a secure PIN, the transaction it will be complete. You don’t have to share your bank details with the vendor.

Mobile banking has surged in India in recent months. Experts say that Unified Payment Interface will further boost mobile banking.
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Good share!

Update at 9:10pm: After further research, this seems worthy of even a channel alert.

Channel Alert
Info: Unified Payment Interface launched. Protects privacy via virtual addresses


Additional details: 29 partner banks will soon enable it. Flipkart has purchased an app called PhonePe which will utilize UPI to allow payments to even daily wage laborers. UPI (built on top of IMPS) seems to be the next big thing for exchanging money.

@prebhartia Is this summary good enough? wink

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It is also mentioned by our Katrina @Troll that such address will help traders of coupon at desidime.com (desibab too ).

@Nigel and his strong team was giving inputs to NCPI by working day and night , this system can be used in public thread without any violation of privacy.

It is believed that a virtual address can be used on visiting card, marriage invitations, leaflets and whatsapp status too. @@Plz@@ can use it as user I’d too, so that any majnu can donate his eyes for her cousin at @plz- troll-here-dont-go-away@ address.

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@[email protected]_0_0_D Bhai Reference Link Check above Details & Conform useful or not kindly provide us

http://www.livemint.com/Industry/XW0fu6pMx5LoHo...

India’s audacious plan to bring digital banking to 1.2 billion people

Flipkart, India’s biggest online retailer, is getting in on the action. The e-commerce leader recently bought PhonePe, which is building a mobile application based on the Unified Payments Interface. Photo: iStockphoto
Bengaluru: India is trying to yank its cash-based economy into the 21st century.

But how do you get 1.2 billion people, many of whom have never seen a bank or opened an account, to send digital payments to each other?

The government’s answer is an effort it has named the Unified Payment Interface. Debuting Monday, it’s a system designed to make transferring and receiving money as easy as exchanging e-mail or text messages.

The goal is to bring banking and financial services to hundreds of millions of citizens, many of them poor and disadvantaged, in one fell swoop. The network was created by India’s retail banks and backed by India’s central bank—and they’re confident it will work because it’s built on top of an even more audacious project: India’s biometrics-enabled national ID system, called Aadhaar.

Also read:

How the unified payment interface will change mobile payments
So far, India’s attempt to assign every citizen a unique 12-digit number associated with a person’s unique iris, fingerprint or facial features, is succeeding—just last week, Aadhaar reached its milestone of registering 1 billion people. With more than 80% of Indians enrolled, it gives the payments system a solid base to build on.

“The interface will bring banking to the unbanked,” said Vinod Khosla, billionaire investor and co-founder of Sun Microsystems. His Bangalore-based incubator Khosla Labs is backing an Indian startup called Novopay, which offers mobile banking at 44,000 kiranas, or neighbourhood convenience stores, in the country.

More than 233 million Indians have never been to a bank, and most accounts have a balance of zero, according to PricewaterhouseCoopers. And even though India has the world’s second-biggest population, there are only about 23 million credit cards in the country, according to the Reserve Bank of India.

India is hoping to replicate the success of a similar digital-payments scheme in Kenya. Introduced in 2007, Safaricom’s M-PESA system lets people send and receive money via mobile phones. What’s impressive is the sheer number of people doing so: 22 million, or half the African country’s population. India’s system is designed to work at a more basic level, with payments flowing between mobile, banking and other networks.

That also means mobile banking’s growth potential is huge. India has the world’s fastest-growing smartphone market, which is projected to double in a few years from the current 220 million users. Soon, all it will take in India to send money is a phone number, an Aadhaar number or a simple virtual-payments address.

“The robust system will help India leapfrog the desktop and the credit-card economy to become a mobile-first economy, accelerating e-commerce and driving a host of financial services,” said Nandan Nilekani, who led the push to introduce Aadhaar and has been advising banks on the rollout of the new payments network.

The main challenge will be cost. In order for India’s new digital payments system to succeed, transaction fees will have to be set very low in a country where the average monthly wage is about $300. While the network’s backers say costs will come down, detractors said the banks will have to keep fees affordable. Success will depend on the combination of banks, startups, user experience and digital literacy, said Akanksha Sharma, senior analyst at research firm GSMA Intelligence.

Srikanth Nadhamuni, chief executive officer of Khosla Labs, said the best way to think of the project is by comparing it to how shampoo was introduced in India. Decades ago, most people couldn’t afford to buy an entire bottle of shampoo, so Unilever, Procter & Gamble and other companies sold them in small sachets that people could afford to buy, paving the way for marketing everything from detergent to toothpaste in rural areas. Nadhamuni is betting that the new digital payments system will be low-cost, high-volume, like a “shampoo-sachet revolution in the financial sector.”

Flipkart, India’s biggest online retailer, is getting in on the action. The e-commerce leader recently bought PhonePe, which is building a mobile application based on the Unified Payments Interface. The app will let Web shoppers pay for goods, daily wage workers manage bills and help migrant workers send money home—with just a phone number.

“UPI has the potential of transforming the entire payments ecosystem in the country,” said Binny Bansal, Flipkart’s co-founder. Bloomberg

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How the unified payment interface will change mobile payments

The payments interface is expected to bring about a significant shift in the way mobile banking transactions are conducted

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Mumbai: The National Payments Corp. of India Ltd’s (NPCI) most ambitious project, unified payments interface (UPI) system, will go live on Monday. The payments interface is expected to bring about a significant shift in the way mobile banking transactions are conducted.

Mobile banking has surged in India in recent months as banks have pushed both retail and corporate customers to adopt platforms designed to transact on the phone. In the September-December quarter, the value of mobile banking transactions surged 82% over the same period last year.

The launch of UPI could quicken its growth further. Here’s how:

1. Reduce need for e-wallets:

UPI is set to allow you to make payments using your mobile phone as the primary device without the need for you to download an app to send or receive money.

Hence, you may no longer need an e-wallet if convenience is your primary focus for using the product. Also, you will be able to use multiple e-wallets seamlessly as they will become inter-operable with UPI.

2. No need to disclose identity while making payments:

Sample this. If you want to settle your bill with the cab driver at the end of the journey, you just have to give your virtual address and the driver will request money from it. Sure, the system will check with you.

You will get a message on your mobile phone asking for authentication.

Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require you to share bank details with either the driver or the cab service provider. Also, since UPI runs on Immediate Payment Service (IMPS) platform, the service will be available real-time and 24×7.

3. Use any bank product:

UPI will make the payment system inter-operable. Hence, you will be able to use the products of any bank, even if you are not a customer, which has entered into an agreement to use the UPI platform.

4. One-click, two-factor authentication:

And finally, UPI enables a two-factor authentication in one click. So far, for a two-factor authentication, you have to click multiple times. With UPI, you will be able to do it at one click. This system will allow for a one-click, two-factor authentication on mobile phones across bank accounts

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Nice share biggrin

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http://trak.in/tags/business/2016/04/11/npci-up...

Unified Payment Interface All Set To Be Launched Today; 3 Ways It Will Revolutionize #DigitalIndia

Barood Bhai Check above PDF LINK Complte Information Avilable @PDF

@[email protected]_0_0_D

http://www.mpf.org.in/pdf/NPCI%20Unified%20Paym...

PM Modi’s Digital India vision was all about connecting India using Digital platform so that technology can be the fulcrum using which development & progress can be spread all over the nation.

And, National Payments Corp. of India Ltd (NPCI) powered Unified Payment Interface is all set to introduce a major leap in this decision, as the massive project will be launched today.

As per reports emerging, Reserve Bank of India (RBI) will formally launch this platform today, wherein 29 banks would be enabled with this interface under the 1st phase; and then gradually other banks would be brought into the system.

We had earlier shared how Unified Payment Interface (UPI) has the power to disrupt the existing mobile wallets platform in India; but there is much more to it.

Find out three ways UPI will revolutionize mobile banking and Digital India with a single stroke:

Dawn of the Cashless World

Using UPI’s powerful platform, which uses a single identifier to transfer money from one end to the other, would signal a new dawn of cashless world in India. As less cash would be transacted and exchange, experts claim that corruption will decrease, and more people would be included within the banking and tax net.

As of now, almost 95% of all transactions in volume, and 65% of all transactions in value terms are held in cash; which is almost 30% more than what other developed countries are doing. UPI is all set to change that.

Small Amounts Would Be Now Very Easy To Transfer

When it comes to mobile banking, the biggest challenge was to enable transfer of small amounts of money from one end to the other. And UPI’s instant transfer mechanism will seamlessly enable that. Just like small sachets of shampoo enabled deep penetration of FMCG products in rural hinterland of India, the ability to transfer small amounts of money will encourage mobile, digital and usage of technology in rural India.

For a country like India, where an average citizen spends only $1.8 per day, UPI can be a masterstroke to encourage micro-spending using mobile.

Platform Independent Mobile Banking

UPI’s biggest advantage is that, it is independent from any platform – users of SBI can easily send money to an HDFC Bank account holder; as soon as you complete an auto-ride, you can instantly transfer the fare using auto-driver’s mobile/Aadhar Card number.

Hence, dependency on a particular mobile wallet or a bank account will vanish with UPI, and every citizen of India would be able to use and utilize the wonders of mobile banking, Digital India and technology using either Aadhar Card or their mobile number.

As per Nandan Nilekani, “The robust system (of UPI) will help India leapfrog the desktop and the credit-card economy to become a mobile-first economy, accelerating e-commerce and driving a host of financial services,”

Using UNI, Govt. wants to make payment transfers as simple as making a call or sending an email; and the first steps have already been taken.

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Summary bhi hona chahiye last mei toungueout

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@prebhartia wrote:

Summary bhi hona chahiye last mei toungueout


Shall request our old cutie reporter
@DimerAbhi

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The Digital India Campaign: An Executive Summary

The Prime Minister inaugurated the Digital India campaign last week. It is an umbrella program that aims to cover multiple ministries and departments with the whole program being coordinated by the Department of Electronics and Information Technology. The program has a focus on nine areas. These are:

Broadband highways – Connecting villages to a national optical fibre network, Virtual network operators to be leveraged for urban connectivity infrastructure and a national information infrastructure for government.

Universal access to mobile connectivity – To improve mobile network penetration and fill the connectivity gaps across the country

Public internet access programme – Increase the number of common service centres across the country and make them viable and convert post offices into multi-service centres

e-Governance –Re-engineer government processes around IT and make them more efficient

e-Kranti – 44 mission mode projects already in various stages of implementation for the electronic delivery of services

Information for all – An open data platform for disseminating government data sets, social media and online engagement through email and sms by government with citizens

Electronics manufacturing – a target of net zero imports in electronics by 2020, with focus on microprocessor fabs, fab-less design, Set top boxes, VSATs, mobiles,cConsumer & Medical electronics, Smart energy meters, smart cards and micro-ATMs

IT for jobs – Training youth with skills required for jobs in the IT/ITES sector

Early harvest programmes – Projects that can be implemented in a short period of time, including WiFi for all universities, public WiFi hotspots, Biometric attendance systems for central government, SMS based weather information and disaster alerts and the national portal for lost and found children.

At the inaugural function itself, business had promised Rs 4.5 Lakh Cr as part of the project. This is over and above the 1.13 Lakh Cr committed by the government.

Credit Goes to :- Barood Bhai @[email protected]_0_0_D

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@cool170302 wrote:

many of them purchased that stock on 29 march @99
the prices of the stock increased because of the reduction of the borrowing of the company by the end of fiscal FY16. The total borrowings have decreased from 853.13 crore to Rs 410.6 crore.


Which thread it relates ?

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@DealSeeker wrote:

Good share!

Update at 9:10pm: After further investigation, this seems worthy of even a channel alert.

Channel Alert
Info: Unified Payment Interface launched. Protects privacy via virtual addresses


Additional details: 29 partner banks will soon enable it. Flipkart purchased an app called PhonePe which will utilize UPI to allow payments to even daily wage laborers. UPI (built on top of IMPS) seems to be the next big thing for exchanging money.

@prebhartia Is this summary good enough? wink


Better than nothing smile

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As UPI would be interlinked with Aadhaar, which in turn would be integrated with PAN, the govt is focusing to have 100% surveillance of all your transactions and to make sure there is zero tax evasion.

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@panchabhut wrote:

As UPI would be interlinked with Aadhaar, which in turn would be integrated with PAN, the govt is focusing to have 100% surveillance of all your transactions and to make sure there is zero tax evasion.


I Dont think aadhaar is mandatory ,
Adhar technology will be used fir sharing the transactions msg. Between member banks.

But , yes aadhaar could be mandotory if any concession is passed by govt.

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Now Aadhaar has the strength of Law. Supreme court directives have been nullified. Only last week, PMO scrapped plans of labour ministry to issue separate smart cards and directed them to use Aadhaar as identifier. There is no need for any subsidy component. Govt can now make it mandatory to link with aadhaar even without subsidy.

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Raghuram Rajan has just turned your smartphone into a bank

Pratik Bhakta & Preeti Kulkarni, ET Bureau

RBI launches Unified Interface Payment system
Smartphones are not just useful for social media, videos and taking selfies. They will now become an important part of your daily life by doubling up as a portal for making payments, sending and receiving money etc.

Ten of the country’s biggest banks along with the Reserve Bank of India have just launched a Unified Payments Interface (UPI) — a mega app that will sit on your smart phone once you have downloaded it and dramatically reduce the cost and time taken for making simple payments. What’s more, you can use this app to pay for any transaction below Rs 1 lakh, even something as low as Rs 50.

The biggest impact of this app will be on third-party payments. Today, if you want to pay someone, you need to add him or her as a beneficiary. You need the IFSC code and bank account number and branch etc. The UPI app does away with all this. All you need is the receiver’s unique ID. Open the UPI app, select the amount to be paid, add the unique ID of the beneficiary and select ‘send’. The app will ask for a mobile pin to authenticate the payment after which it is done.

This can be useful not just in making regular payments but also in transactions between friends. You have just had a drink at the bar and want to share the bill. One person pays and the others just transfer the money to his account. No need to use cash, no need for the IFSC code and all that.

Remittances will also become easier and the same process applies here as well. Cash on delivery, the big driver behind the ecommerce boom, will probably die a natural death for people with smartphones. They can use the UPI app to pay after receiving the goods. All they need to know is the unique ID of the ecommerce firm. The buyer can also scan a QR code that the delivery boy carries through his UPI app or pay directly to the unique ID of the delivery boy.

How can a customer use UPI

1. He will need to have a bank account and a smart phone.

2. Download the UPI app of a bank from PlayStore

3. Connect the bank account

4. Create a Unique ID

5. Generate a mobile pin

6. Also link Aadhaar number

Only 10 banks are part of this now but others are expected to join. Another big feature of UPI is that you can use any bank’s systems to transfer money or make payments. You don’t need an account with that specific bank to be able to use its UPI app. All you need to do is to download that bank’s UPI app, register yourself and make the payment.

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Firstpost

S Murlidharan

Here’s why Unified Payments Interface can be a game changer in the era of cashless payments

India has several IT led revolutions to boast. First it was NSE backed by a robust depositories regime and then Universal Account Number (UAN) that is portable and lasts right through the employment career of an employee.
Something similar in the banking front was launched on Monday the 11th April 2016 by the National Payments Corporation of India (NPCI) — Unified Payments Interface (UPI). Right now net banking requires a lot of preliminary steps like registration of the payee, one time password (OTP) at the time of payment etc. And mobile wallets though convenient need to be filled in either with debit/credit card or NEFT.

Banks in addition have been resenting the pure play mobile wallet companies like Paytm, with many of them shutting their cards and net banking facilities for transfers to their rivals i.e. pure play mobile wallet companies. It is another matter that despite this resentment and resistance in 2014-15, as many as 255 million non-bank mobile transactions were done as opposed to 172 million bank mobile transactions. Obviously the ease of operation worked in favor of the former. Now UPI promises to wrest back the lost business to the banking sector.

Banks will allot you a unique ID like the email ID. And in it is seeded all your confidential information in an encrypted form. When you need to make a payment, you don’t have to take the trouble and risk of typing out your debit card/credit card details, net banking ID etc. In short UPI does away with cards except for withdrawal from ATMs. The ID is followed by PIN to complete the transaction. As it is mobile wallet has quite a few restrictions with each service provider (as opposed to pure play mobile wallet) demanding payment from his own portal’s wallet if you want the discount offered by it.

Ola for example has its own wallet and so has OYO rooms. I have to take the trouble of filling all these wallets especially if I am possessed by wander lust! Now the UPI proposes to shift the advantage to the customer who can get as many IDs from his bank as he wants so that he can use one for the kirana store, one for the telecom service provider etc for safety and ease of account keeping. To these entities, your identity will be through the unique ID, and the payment will be made on presentation of the bill by just tapping out the PIN. As simple as that. Of course, the Olas and OYOs of the world might still persist with their discount only if payment is made through Ola/OYO wallet strategy
In a country of over 25 million merchants, only 1.2 million have card readers. Of course the risk-averse customer has also shied away from these establishments for the fear of his card being cloned. Secondly, use of Smartphone is on the increase though nowhere near the levels of Aadhaaar registration and ordinary cell phones—-both recently crossing the one billion mark in the country. But Smartphone users are about 200 million only. All out efforts therefore must be made to increase Smartphone penetration if UPI is to succeed, eventually rendering cards redundant for online payments.

The beauty of UPI is it is amenable to be initiated by the ‘push’ from the customer as well as ‘pull’ by the supplier of services or goods. It is the ultimate in seamless funds transfer.

UPI when fully operational across the banking sector would be a win-win. It would be good for the banking sector, good for the bank customers in terms of use of doing payments and transfers. And above all it would be good for the economy as it would substantially end cash payments. Use of currency notes would come down and the economy would become more transparent, amenable to compilation of authentic data.

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Good sales pitch. But whats is deliberately not stated is that it would make all transactions as from “verified accounts”. Which means, the Income Tax dept will also have all the data to question the sources of income, if the transaction volume is high or even claim taxes for the cash backs received. So it would effectively ensure the end of all “loots”

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prashant nayakanti
prashant nayakanti
Chief Motivator for Safe ePayments
11 Wishes for NPCI_Unified Payment Interface APP
April 16, 2016 • 13 Likes • 1 Comment

In the next one month, the Pioneers of UPI will release their APPs to the public. Beta Testing is going at a hectic pace for quick adaption of UPI.

Wish No 01: Ability to have a lower transaction cap and upper transaction cap.

Wish No 02: Ability to register credit beneficiaries i.e credits should happen to registered beneficiaries only.

Wish No 03: Ability to register debit beneficiaries i.e debit instructions should be received only registered beneficiaries.

Wish No 04: Ability to restrict transactions within a pin code only.

Wish No 05: Ability to receive reminders in case of insufficient balance insufficient for future-dated transactions.

Wish No 06: Ability to choose the execution date and time for future-dated transactions.

Wish No 07: Ability to disable transactions for a particular time-period except future-dated transactions.

Wish No 08: Ability to earn loyalty points, redeem points.

Wish No 09: Ability to receive credit conformations to beneficiary’s accounts i.e just like NEFT.

Wish No 10: Ability to receive credits only from registered receivers only.

Wish No 11: Ability to lodge queries directly from the APP itself.

Keep on adding your wishes in the comments column

Written by

prashant nayakanti

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Vibhu AryaHead of Strategic Partnerships and FinTech (FreeCharge Wallet and Payments) at Snapdeal.com

India’s Payment Banks -The Tata Nano Moment ?

One of the remnants of India’s license raj, RBI is finally opening the banking sector, it has repeatedly declared to offer on-tap licensing of existing types of banks and introducing newer types of banks. Bank licenses have hitherto been as scarce as a Giant Panda birthing success rate, restricted to a pair each decade with a rare triplet, minus the last round when RBI stunned all, including the eleven payment bank licensees — a diversified brigade of all Indian telecom operators, a leading pharma major, a reliable oil & gas major, a business correspondent operations company, a non-bank finance company, a wallet company and the government owned employer of the once-in-ten-years passport only delivering postman.

The Wikipedia entry of a Bank states, it is a financial institution that creates credit by lending money to a borrower, thereby creating a corresponding deposit on the bank’s balance sheet. Payment banks do not meet this definition, they cannot create credit and can only create liabilities i.e. hold deposits on which they must pay interest. Further, they also must set up ‘some’ branches and ATMs, can issue debit cards (no credit cards), offer internet banking; can send and receive remittances and distribute mutual funds, insurance and pension products. Akin to printing a newspaper without advertisements, a payments bank cannot lend and resultant commercials are inked red.

Is this perhaps a reason, one of the eleven licensees voluntarily surrendered their license while other licensees grapple with continuous delay of launch timelines, or perhaps why most payment bank licensees have issued equity to big brother banks? Recently T-Mobile, a leading telecom operator, finally gave up on trying to be a bank.

The payment bank’s leaner and elder cousin i.e. the humble wallet (technically a non-bank prepaid instrument — the PPI) can do everything a payments bank can i.e. intermediate loans, investment, insurance products with the ditto INR 100K restriction on deposits. As a payment bank, they will need to pay interest to depositors which a wallet does not have to, actually cannot by law. Payment banks will need to park a meaty majority three fourths of deposit collected in government issued securities at standard rates, requiring them to build massive Asset-Liability management capabilities.A payment bank must comply with the one hundred and fourty seven pager, Banking Regulation Act 1949 and adhere to the continous volley of circulars issued by the banking regulator, whereas wallets need to comply with largely one single circular.

Payment bank must begin with twenty times, the capital requirement of a wallet; they are entitled to ‘Consumer Trust’ which comes affixed with the permission of of using the ‘word’ bank. Wallets will need to earn this trust. Wallets will continue to be lean FinTech companies minus the onerous regulation, focused singularly on offering a great user experience, an ever widening bouquet of products and service through deep strategic partnerships and alliances.

A payment bank has a license moat, a wallet has the opportunity to build a multi-layered moat of world class technology, best in class user experience, fire power of superior algorithmic analysis for fraud management and serving best fit products, building a great  consumer brand and earning trust.

Are Payment Banks the Tata Nano moment for Indian banking?

Written by

Vibhu AryaHead of Strategic Partnerships and FinTech (FreeCharge Wallet and Payments) at Snapdeal.com

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An Indian Fintech Entrepreneur’s Views on UPI
Sampad Swain

Founder & CEO at Instamojo.com
An Indian Fintech Entrepreneur’s Views on UPI

Ever since UPI (Unified Payments Interface) alpha launched on 11th April 2016, I see much confusion amongst various stakeholders. For me, the most relevant question is will UPI kill payment gateway aggregators and PSPs (payment service providers)​?

My answer is No. If you’re interested to know more, please read on…

To understand in detail, let’s understand below 5 pointers:

(1) What is UPI (Unified Payments Interface) & what is it’s objective​?​​ ​And who is an Aggregator​/PSP​ & what is their objective?

For the uninitiated, UPI is a layer on top of the IMPS etc (see image above) which will work on a network of banks, facilitating ​account-to-account transfers in a simple ​and secure manner​​.

In other words, UPI (standalone) will just be another way of transferring funds from ones’ bank account to another without going through the hassles of adding someone as a beneficiary / IFSC / account no (NEFT) or entering MMID / mobile no (IMPS)​. The objective is to simplify the payment process ​vis-a-vis NEFT / IMPS​ which didn’t reach critical mass required to make India cashless — both from person-to-person (P2P) and merchant payments standpoint.

Whereas, a​n aggregator​/PSP​ is one which continuously works towards empowering its customers aka Merchants (​in our case, ​mostly long-tail online merchants and individuals desirous of collecting online payments) with as many payment options possible​ & more. ​For example, debit cards, credit cards, net-banking, cash-on-delivery, IMPS, cash deposits, ​prepaid wallets ​etc. The objective is to provide one stop payment collection solution that encompasses all possible payment instruments in one bucket. But that is not all. The PSPs also supports its clients by creating new products & features to enhance their business outcome too!

Now here is what a PSP brings to the table which UPI does not today​:

Provide other payments instruments which comprises a significant majority portion (~​60​-80​%) of the total online payments. May be, UPI might become the new net-banking, by replacing it as a payment mode.
Detailed information on received payment (who paid & for what), apart from providing transaction management, reconciliation, insights etc.​
Customisation at every level (payment options, payment page, etc)​ which is beyond a simple push-n-pull movement of money via UPI.
Trust custodian — one who provides protection against any dispute between merchant & consumer (this is completely missing in UPI today).
(2) What UPI adds to existing systems & processes? ​

The ​apps ​that will be ​built on ​top of ​UPI ​architecture ​​might not only be easy to use — but the ​mobile first, ​secure & ​interoperable (​any ​bank to ​any bank) nature of UPI makes it one of a kind. With the learnings of ​digital wallets and IMPS​ adoption in the past​, ​NPCI now has all the ingredients to revolutionise the the way Indians pay one another.

(3) Can UPI act as a catalyst and benefit Indian Fintech ecosystem?

We at Instamojo will add “UPI as a payment option” ​in the checkout ​page (representation image below) along with other available payment instruments and ride the wave​ of consumer adoption.

(4) Can UPI adversely affect anyone in the Fintech space?

Launch of UPI at this time is actually a blessing in disguise for payment agnostic players like Instamojo. Because the likely causalities of UPI will be those who have invested time & money in building non-interoperable and siloed products. Namely,

Digital ​wallets — UPI doesn’t allow interoperability of wallets on its platform today.​ Hence, P2P payments might shift entirely via UPI.
Net-banking network providers — ​Many players in the ecosystem had long enjoyed the relationship they had with each banking partner to put the net-banking infrastructure in place. If UPI picks up, ​​it might become a one stop solution to get connected to ​all ​the network of banks​ due to inter-operability. Thus making all their hard work redundant. ​Now simply getting connected with UPI​ architecture​ via one banking partner will ​give exposure to all others banks required to process merchant payments.
Card network providers — If UPI is going to hurt anyone in a meaningful way, it will be the card networks ​like VISA/MC ​which will loose out of the Debit Card ​interchange to some degree, provided RuPay card become predominant.
Moreover, this​ revolutionary approach might make more consumers “online payment ready” in a very short span of time. And I hope, what Telecom revolution did for communication, UPI does the same for the ​Fintech ​space in India.

(5) What happens if UPI takes off massively?

Most digital wallets will lose relevance ​in the P2P payments space ​and will ultimately phase out and die​ like good old pagers​. However, there can be a counter argument that in a winner-take-all or winner-take-most market, the digital wallet provider with largest merchant acceptance network might win due to inter-operability as consumers would gravitate towards the player which provides max fungibility for one’s wallet balance.

So, merchant payment collections via net-banking and wallets will be replaced by UPI. VISA / MasterCard will loose it’s share of revenues from debit card processing since RuPay (India’s own VISA/Mastercard) will share the interchange nuggets which is part of UPI now.

However, aggregators and PSPs will still be central to a Merchant, since such players bring other modes of payment collections too e.g. ​credit ​card, ​unified ​reconciliations of orders with payments, ​integration & APIs, ​customization, ​industry specific pricing & features, data and analytics and possibly ​discovery​ — apart from UPI enabled payments too!

On top of above, an online Merchant who ​is shifting from NEFTs / Cheque / Cash to PSPs for their payments need, will still turn ​t​o the PSP as the ​pain-points still remains the same​, with or without UPI​ coming into play i.e.

Integration & APIs​
Order and transaction management ​
Unified reconciliations​ — orders with payments
Refund ​​management
Dispute resolution
Customization — at every level
Industry specific pricing & features
Data & analytics
Support management
Risk management
Even if UPI solves all the above issues for an Online Merchant, they will still solve a portion of their payment collection needs, as UPI does not support VISA / Mastercard led credit card processing which stands at 20–25 Mn active users in India today.​

Conclusion

It is evident that UPI is a boon and might be the much needed catalyst to increase the digital shopper base of India and in the process, might take a stab at the real enemy — CASH​ or unaccounted money exchanging hands; thus hurting the progress of our economy!

Hence, UPI is working very closely with banks under the guidance of RBI. In turn, banks are partnering with various players to take this new payment instrument to merchants & consumers.

Footnote:

For an aggregator/PSP​​, it will all be the same — only the graph of the credit card processing will dip while a new segment will rise.
Lastly, if someone thinks that banks will themselves act as an aggregator and offer UPI directly to the Merchants. ​W​ell​,​ they tried that before by offering IMPS to merchants which did not work​. ​For argument​s​ sake if ​one​ says it failed because of the ​complex ​MMID​ etc ​and​ now​ with a simpler process it will work, it won’t work for entire suite of payment instruments that a merchant needs.
And finally, if one believes that banks would offer a bundled solution of Cards + UPI — well I would say its will be a good debate to be a part of but end of the day, even banks know what they are good at i.e. retail banking / CASA / lending & deposit arbitrage!
Credits:

http://www.livemint.com/Industry/BTgri6AXTbue3W...
http://www.moneycontrol.com/news/economy/rbi-to...
Written by

Sampad Swain

Founder & CEO at Instamojo.com

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