Unified Payment Interface (UPI)

Why in news?

• Nepal will be the first country to adopt India's UPI system, which will play a pivotal role in transforming the digital economy of the neighbouring country.

More about the news

• NPCI International Payments Ltd (NIPL), the international arm of National Payments Corporation of India (NPCI), has joined hands with Gateway Payments Service (GPS) and Manam Infotech to provide the services in Nepal.

About Unified Payment Interface (UPI):

• Unified Payment Interface (UPI) is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI).
• It eliminates the need to enter bank details or other sensitive information each time a customer initiates a transaction.

How it works?

• The UPI is a real-time payment system.
• It is designed to enable peer-to-peer inter-bank transfers through a single two-click factor authentication process.
• The interface is regulated by the Reserve Bank of India (RBI).
• It works by transferring money between two bank accounts along a mobile platform.
• UPI will use existing systems such as Immediate Payment Service (IMPS) and Aadhaar Enabled Payment System (AEPS) to ensure seamless settlement across accounts.
• Once a single identifier is established, the system allows mobile payments to be delivered without the use of credit cards, debit cards, net banking, mobile wallets etc.
• There is a funds transfer limit of 1 lakh per transaction.

Features of UPI:

• Immediate money transfer through mobile device round the clock 24*7 and 365 days.
• If you are sending money instantly to another UPI account holder, UPI works faster than IMPS and NEFT mode of payments.
• Universal Application for transaction.
• Single Click 2 Factor Authentication.
• Virtual address of the customer for Pull & Push without the need for details such as Card no, Account number, IFSC etc.
• The user can access balances and transaction histories along with sending and receiving money.

Add ons:

• The National Payments Corporation of India (NPCI) has launched UPI 2.0 by adding four new features to make it attractive and safer for users.
• Features of UPI 2.0 are
  • Linking of overdraft account: In addition to current and savings accounts, customers can link their overdraft account to UPI.
  • One-time mandate: Customers can pre-authorise a transaction and pay at a later date.
  • Invoice in the inbox: According to NPCI, this feature is designed for customers to check the invoice sent by merchant prior to making payment. It will help customers to view and verify the credentials and check whether it has come from the right merchant or not.
  • Signed intent and QR: This feature is designed for customers to check the authenticity of merchants while scanning QR or quick response code. It notifies the user with information to ascertain whether the merchant is a verified UPI merchant or not. This provides an additional security.

PRACTICE QUESTION:

Which of the following statements are correct regarding ‘Unified Payment Interface (UPI)’?

1. It was created National Payments corporation of India (NPCI).

2. There is a funds transfer limit of 1 lakh per transaction on UPI.

3. It is a real time payments system.

Select the correct answer using the code given below:

(a) 1 and 2 only

(b) 2 and 3 only

(c) 1 and 3 only

(d) 1,2 and 3

Answer