NPCI: Driving India to less-cash economy

Dr N Rajendran

Over the years, NPCI has been providing the central infrastructure for various retail payment systems in India, including Aadhaar-enabled Payment System (AePS), Immediate Payment Service (IMPS), among others. Once NPCI builds pathways, different payment organisations can ride on them, says Dr N Rajendran, Chief Technology Officer, NPCI, in conversation with Elets News Network (ENN).

National Payments Corporation of India (NPCI) is taking a lot of measures to popularise UPI. What more would we get to see at the technological front as far as UPI’s upgradation is concerned?

The growing popularity of Unified Payments Interface (UPI) can be attributed to its simple, safe, cost-effective and mobile-based interface. NPCI is looking to make UPI the preferred mode of transactions for digitally savvy Indians and we are continuously looking for ways to make that happen.

With UPI’s upgraded version UPI 2.0, NPCI is offering customers useful new functions.

Here are key features of UPI 2.0:

Linking of the overdraft account: In addition to current and savings accounts, customers can now link their overdraft account to the UPI. They can transact instantly and all benefits associated with overdraft account are made available. UPI 2.0 serves as an additional digital channel to access the overdraft account.

 One-time mandate: UPI mandate can be utilised in a scenario where the money is to be transferred later by providing commitment at present. UPI 2.0 mandates are created with one-time block functionality for transactions. This enables the customers to pre-authorise a transaction and pays at a later date. One-time mandate works seamlessly for merchants as well as for individual users.

Mandates can be created and executed instantly. The amount will be deducted and received by the merchant/individual user on the date of the actual purchase.

Invoice in the inbox: This particular feature is designed for customers to check the invoice sent by the merchant before making payment. It helps to view and verify the credentials and check whether it has come from the right merchant or not. Customers can pay after verifying the amount and other important details mentioned in the invoice.

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 additional security. Customers are informed in case the receiver is not secured by way of notifications.

How has digital payment innovations implemented by NPCI helped in transforming the country? What is the level of progress?

NPCI is playing a key role in India’s push towards a cashless economy. We are changing the way payments are made in India. Over the years, NPCI has been providing the central infrastructure for various retail payment systems in India, including Aadhaar-enabled Payment System (AePS), Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC), Bharat Bill Pay and RuPay Contactless NCMC cards among others.

Once NPCI builds pathways, different payment organisations can ride on them. According to a recent study by Assocham-PWC India, digital payments in our country will be more than double to $ 135.2 billion in 2023 from $ 64.8 billion this year. India is also expected to clock the fastest growth in digital payments’ transaction value between 2019 and 2023 with a compounded annual growth of 20.2 percent. The study also showed that India’s share of the worldwide transaction value of digital payments is also set to increase from 1.56 percent to 2.02 percent in the next four years.

 Recently, the Nandan Nilekani committee on digital payments had recommended that the Reserve Bank of India (RBI) and the government must target growth in the volume of digital payments by a factor of 10 in three years, leading to doubling in value relative to gross domestic product. How is NPCI assuring the safety quotient? While NPCI is continuously working towards enhancing the security of its products and services from attacks, fraudulent activities can be better prevented by consumer education.

The entire ecosystem including Banks and Fintech companies is working collectively towards creating awareness and educating customers to refrain from sharing their account/card credentials, OTP/PIN and/or giving access to their mobile handsets to unscrupulous persons through such remote screen access apps. UPI platform, for example, is fully secure and is also 2FA enabled. NPCI in its endeavour to safeguard the UPI ecosystem will continue to proactively monitor the fraud space and help implement control measures wherever required.

Tell us about UPI 2.0. How is the response to this new version?

The growing popularity of UPI 2.0 can be attributed to its simple, safe, cost-effective and mobile-based payment system. With the customers’ awareness and comfort increasing, people are moving towards UPI to carry out high-value transactions.

UPI allows a user to transfer money across multiple bank accounts in realtime, without revealing details of a beneficiary’s bank account. Money can be immediately sent via one’s mobile phone at any time, regardless of a bank’s working hours. A user only needs a robust internet connection, a Smartphone, and a UPI ID to send funds with a cumulative value of Rs 1 lakh a day or 10 transactions worth that amount.

UPI has been adopted as a payment mode by e-commerce sites, cab aggregators and food ordering apps. UPI transactions have surged over four times in the last year, but the potential is greater. The Reserve Bank of India (RBI) recently announced its vision for payments in India for 2019-2021, which will enable the setting up of safe, secure, accessible and affordable payment systems.

 The idea is to move towards a cashless society by providing more payment options to people, who have been untouched by such systems. RBI expects the number of digital transactions to increase by more than quadruple from 20.69 billion in December 2018 to 87.07 billion in December 2021.

What role is social media playing in popularising the usage of digital payments in India? How is NPCI leveraging the power of social media?

Social media has come a very long way since being introduced as a new method of communication. What started as a medium for connecting with peers has transformed into a business tool for ads and brand promotions. Pioneers of social media will continue to innovate, the latest evolution involving implementation of payment gateways within the social media space.

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