Real-time money transfer via Unified Payments Interface has becomes a reality.
National Payments Corporation of India (NPCI) announced that the Unified Payments Interface (UPI) is launched and it is live and currently available for customers of 21 banks.
What is UPI?
UPI is an app – a payment solution which empowers a recipient to initiate the payment request from a smartphone. It facilitates virtual payment address as a payment identifier for sending and collecting money and works on single click 2-factor authentication.
The product will enable money transfers – both ‘Push’ and ‘Pull’ through smart phones.
The two important features of UPI are, (i) it facilitates customer convenience by eliminating the need for providing detailed account/beneficiary details, through the use of virtual address and (ii) it facilitates interoperability of person-to-merchant payments (both push and pull).
Currently to to make an online payment, first you need to add the beneficiary details, including the individual’s name, bank account number, IFS code, etc. While using UPI app, these processes are not required as the identifier is the virtual payment address or the unique ID of the beneficiary. This unique ID can be your phone number tagged along with the name of your bank.
Once you have the unique ID of the beneficiary, enter the app, put amount to be paid, the unique ID and click ‘send’ button. The banks will have to make their apps UPI-enabled.
Also, unlike RTGS and NEFT, UPI app can be used to transfer funds 24 hours.
The launch of UPI was announced by the former Reserve Bank Governor Raghuram Rajan in April this year.
After assessing the success of pilot run, RBI had accorded its final approval for public launch of the product.
National Payments Corporation of India has developed the system. Soon the UPI app will be made available on Google Play Store by banks.
Customers of as many as 21 banks can avail of the app’s services. Some of the banks which have gone live Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Oriental Bank of Commerce, Union Bank of India and Vijaya Bank, among others.
This is a step towards transforming India into cashless economy.