The Unified Payments Interface (UPI), the new payments method that is set to revolutionise the way consumers make payments, is set to go live on Thursday.
"We will launch UPI tomorrow evening and we have 21 banks on board," said A P Hota, managing director and chief executive officer, National Payments Corporation of India (NPCI), on Wednesday.
The launch was delayed by around a month from the July 31 deadline set by NPCI because some lenders were not prepared. It was also deferred because NPCI had said only lenders with 1,000 pilot customers, 5,000 transactions and 90 per cent success rate would be allowed to go operational. Initially, 29 banks had tied up with NPCI. However, only 21 have been able to meet the criteria. Some major lenders such as the State Bank of India have not been able to meet the deadline.
UPI is expected to boost mobile money transfer. It will be built on the existing Immediate Payment Service that allows real-time transfer of money and is interoperable across banks.
By using this application, a customer can transfer money to another person through a unique virtual address (virtual addresses are aliases to bank accounts allowing a customer's account to be uniquely mapped), or mobile number, or Aadhaar number. Neither the payer nor the payee have to share bank account details.
WHAT IS UPI?
An application that will make money transfer as easy as sending a text message by allowing real-time money transfer.
How will it work?
By using this application, a customer can transfer money to another person through a unique virtual address (virtual addresses are aliases to a bank account allowing a customer's account to be uniquely mapped), or mobile number, or Aadhaar number. Therefore, customers do not need to know the payee's bank account details, etc, and this will make the process simpler.
How does it score over existing payment methods?
Apart from doing away with the need to know someone’s bank account details, one can also raise payment requests and ask for money.
Unlike wallets that users need to pre-load, UPI will work seamlessly with a user's bank account through IMPS. A credit or debit card needs to be swiped at merchant establishment physically, or card details need to be provided in case of online shopping. With UPI, customers can shop with their virtual addresses and do not need to provide any financial detail.