The National Payments Corporation of India (NPCI) last Monday rolled out UPI in order to revolutionise payment system in the country.
A few banks have tied up with the UPI and agreed to provide the services to customers. Managing director-cum-CEO, NPCI, AP Hota said the corporation is optimistic that more banks would join the UPI this year. We want to fulfill the RBI’s vision of becoming a less-cash economy, he added.
Now, one can transfer money to another person through a unique virtual address (virtual addresses allowing a customer’s account to be uniquely mapped), or mobile number, or Aadhaar number. For this, customers need not to know the payee’s IFSC code and account details to transfer a sum of up to Rs 1 lakh per transaction.
UPI allows any bank (having a tie up with UPI) customer to download a UPI app of any bank and consolidate all their bank accounts for transactions. With this, one can continue to use the same app unless the person changes the mobile phone or number, as it serves as an identification.
The UPI is believed to be simpler than other modes of payments like Immediate Payments Service (IMPS), National Electronic Funds Transfer (NEFT) or Real-time Gross Settlement (RTGS).
Experts opine that steep surge in usage of smartphones would slash cash transactions in the country and the mobile money would drive the next leg of growth.
An RBI data shows, value of mobile banking transactions rose 46 per cent to Rs 46,029 crore in December, compared to a month ago.
Shikha Sharma, MD & CEO of Axis Bank attributed safety and convenience as challenges involved in moving to digital payments. However, she expressed confidence on UPI. “With UPI, You don’t need to move money from one bank account to a wallet and so you can transact directly from where your money is stored and saved, making it easier.”