UPI to Go Live this Month with 15 Banks

The Economic Times - - Economy: Macro, Micro & More - Pratik.Bhakta@ times­group.com

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.

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