Banks can join UPI without becoming issuer :NPCI

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Pushing for increased financial inclusion and digitally-enabled banking, the National Payments Corporation of India (NPCI) has allowed banks who do not act as issuers in the payments ecosystem to join the Unified Payments Interface (UPI) platform.

“As a pre-requisite to on-boarding banks into the UPI ecosystem, member banks were mandated to certify themselves first as an issuer and only then as an acquirer. This was a limiting factor for some banks which are keen to join UPI but have no retail presence,”, said a circular dated June 11, from the umbrella organisation for all retail payment systems in India, which aims to allow all Indian citizens to have unrestricted access to e-payment service.

Worth noting is, an issuing bank is one which enables a merchant transaction at the consumer’s end, while the bank facilitating it at the merchant’s end is called an acquiring bank.

At present, while most major banks are engaged in both functions, those with a limited retail customer base have found it difficult to act as issuers.

Such banks cater to corporates and institutions and based on representations received from this category of banks, the proposal of allowing such banks with a minimal retail base as acquirers only was placed before NPCI’s steering committee.

“The steering committee members assessed and accorded its approval in the next meeting held on January 25, 2018,” NPCI’s official statement added.

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