Unified Payment Interface: Now, bank through yo...

Unified Payment Interface: Now, bank through your smartphone; here is how it works

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Unified Payment Interface: Now, bank through your smartphone; here is how it works

Unified Payments interface is a channel that powers multiple bank accounts into a single mobile application (of any bank) of a participating bank, merging several banking features, seamless fund routing & merchant payments into one hood.

By: FE Online | April 12, 2016 11:36 AM

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With the launch of Unified Payments Interface (UPI) by Reserve Bank of India Governor Raghuram Rajan on Monday, your smartphone will work as a payment bank.

What is Unified Payments interface (UPI)

Unified Payments interface (UPI) is a channel that powers multiple bank accounts into a single mobile application (of any bank) of a 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.

It also provides an option for scheduling push and pull transactions for various purposes like sharing bills among peers.

One can use UPI app instead of paying cash on delivery on receipt of product from online shopping websites and can perform expenses like paying utility bills, over the counter payments, barcode (scan and pay) based payments, donations, school fees and other such unique and innovative use cases.

The interface is the advanced version of NPCI’s Immediate Payment Service (IMPS) which is a 24*7*365 funds transfer service.

How it works

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. A customer can also decide to use the mobile number as the name instead of the short name for the virtual address like 12345678...bi.

UPIs unique features

  1. – Single click 2-Factor authentication for subsequent transactions
  2. —‘Virtual address’ as a payment identifier for sending to & Collecting money from
  3. – Bill splitting among friends
  4. – Best answer to Cash on Delivery hassle, running to nearest ATM or rendering exact amount
  5. – Merchant Payment with Single App or In-App Payments
  6. – Schedule, PUSH and PULL Payments for various purposes
  7. – Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based payments
  8. – Donations, Collections, Disbursements Scalable

Benefits for banks:

  1. – Single click 2-Factor authentication for subsequent transactions
  2. – Universal APP for transaction
  3. – Leveraging existing infrastructure
  4. – Security (on other bank app it uses NPCI library to securely capture credentials)
  5. – Payment basis Single/ Unique Identifier
  6. – Enable seamless merchant transactions

Benefits for end customers:

  1. – Round the clock availability
  2. – Single APP for accessing different bank accounts
  3. – Use of Virtual ID is more secure, no credential sharing
  4. – Faster checkout
  5. – No timeout scenario

Benefits for merchants:

  1. – Seamless fund collection from customers – single identifiers
  2. – No risk of storing customer’s virtual address like in Cards
  3. – Suitable for e-Com & m-Com
  4. – Resolves the COD collection problem
  5. – Single click 2FA facility to the customer – seamless Pull
  6. – In-App Payments (IAP)


(Source – http://www.financialexpress.com/article/persona...)

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Additional Note on UPI from ET.

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 e-commerce 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

(Source – http://economictimes.indiatimes.com/industry/ba...)

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Upi is slowly revolutionising money transfer but the guy who put all his hard work to make this possible Raghu Ram Rajan isn’t a part now
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