New interface for easy money transfer

Slated to be launched next week, the Unified Payments Interface aims to revolutionise the payments space

The National Payments Corporation of India (NPCI)’s Unified Payments Interface (UPI) — which could revolutionise the payments space by making money transfer as simple as sending a text message — is slated to be launched next week.  Twenty nine banks will operate the platform in the first phase.

“Unlike the Immediate Payments Service (IMPS) which allows people to only send money, it will allow people to receive money and initiate requests, too. So, if someone has to raise an invoice or ask for a payment, they can send a message requesting money and the person on the other end will just accept it and the money will get transferred,” said A P Hota, managing director & chief executive officer, NPCI.

Experts believe UPI can change the micro payment landscape, pushing electronic payments to small merchants in remote corners.

EASY WAY OF SENDING MONEY

• With the United Payments Interface (UPI), money transfer will be as simple as sending a text message
   
• In the first phase, which will start next week, 29 banks will operate the platform
   
• It will be inter-operable across different banks and will allow instant payments
   
• Experts believe UPI could change the micro-payment landscape in the country

Payments can be made by only knowing the mobile or Aadhaar number. It eliminates the requirement of receiver’s bank account, IFSC code, etc. Apart from this, it is inter-operable across different banks and allows instant payments.

“UPI is the next-generation  system that provides a system-driven scalable architecture and a set of standard application programming interface (API) specifications to facilitate online payments through a single interface/app on a smartphone. This allows for innovation in newer forms of identity, authentication, and banking,” said a report by JM Financial.

NPCI is also looking at relaunching the facility of money transfer via feature phones. This will allow consumers without smartphones to transfer money through mobiles.

According to the JM Financial  report, 95 per cent of consumer transactions in volume terms and 65 per cent in value terms are in cash. This is much higher than the 40-50 per cent transaction in volumes and 10-20 per cent in value terms for advanced economies. Therefore, the government and the Reserve Bank of India have been working on ways to reduce cash in the economy.  Considering the number of smartphones in the country is estimated to go up from 150-200 million to 500 million, mobile money transfer is expected to get a boost.