UPI to Go Live this Month with 15 Banks
Mumbai: RBI’s brainchild, Unified Payments Interface (UPI), launched in April this year, will finally go live by the end of this month with all the 15 participating banks.
UPI allows users to send any amount of money below ₹ 1 lakh instantly without having to add beneficiary as in the case of IMPS. It can be used for settling bills among friends, making payments to merchants in the offline world, and as a replacement for cash on delivery as well. UPI will be based in an app on the smartphone and the user can use any of the banks’ UPI apps for payments from any of his bank accounts.
National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments system in India that developed the backend technology for all transactions on UPI, said it is in the final stages of testing the integration with banks and rectifying operational errors. It has even finalised the fees that need to be paid to NPCI and the beneficiary bank.
“We will be going live on all the 15 bank apps within the end of this month. The banks have already developed the applications and we are in the final stages of testing,” said Dilip Asbe, chief operating officer, NPCI. “For peer-to-peer payments, we have fixed ₹ 1 for transactions up to ₹ 25,000 and ₹ 5 for transactions between ₹ 25,000 and ₹ 2,00,000.”
While these are the rates to be paid by the remitter banks, users will not have to pay anything extra. In case of merchant transactions it has been fixed at 0.4% up to 2,000 and 0.65% beyond that. Asbe, however, added that after the app goes live and the banks get a few merchants on board who start using it for payments, it will take another 3-6 months to iron out the operational glitches till it attains a stage of smooth functioning.
Unified Payments Interface was officially launched by the RBI Governor Raghuram Rajan on April 11. While the backend technology was ready and a few merchants were on board, banks were still in the process of developing their UPI apps. Now with the banks also ready and the integration with NPCI being in its final stages, the apps would be available for download in the Android app store. “Once the app goes live, banks will need to integrate their systems with the leading ecommerce firms and thereby channel payments through the UPI app. Our main target is also peer-to-peer payments other than consumer spending,” said Asbe. Even banks have started their process of integrating with various genres of merchants, who would accept payments via UPI. “Currently, we are integrating with about 10 merchants. More merchants are expected to be on-boarded in the next couple of weeks. We will release the names once the app goes live,” said Ritesh Pai, country head, Digital Banking, Yes Bank.
However, only people with debit cards can use UPI as NPCI is keeping the 16-digit card number and its expiry date as the second factor of authentication. “The first factor is the mobile number, which will get verified through the One-Time Password, but for second factor we chose the debit card because it has the highest reach in the country,” said Asbe.
NPCI is also experimenting further with QR code based payments so merchants would not need to invest in bulky POS terminals to accept digital payments from customers.
However, in the initial stages, the payments will be done through a virtual payment address. “Even if four banks come up with excellent UPI apps that would be enough for UPI to scale up, unlike mobile banking, a customer will not need numerous applications to access his different bank accounts,” explained Asbe.