change the way you pay with unified payments interface
TRANSCRIPT
Reserve Bank of India Governor Raghuram Rajan
launched the Unified Payments Interface (UPI) system on
Monday, as its latest offering in boosting digital money
transfers.
The interface has been developed by National Payments
Corporation of India (NPCI), the umbrella organisation for
all retail payments in the country. The UPI seeks to make
money transfers easy, quick and hassle free.
Ten major banks — SBI, Canara Bank, BOI, ICICI Bank, HDFC Bank,
Punjab National Bank, Bank of Baroda, HSBC, and Citi Bank — are
integrating the interface with their mobile apps. “29 banks had concurred
to provide UPI service to their customers. We are confident that several
banks will join UPI this year and the number will multiply further,” said A.
P. Hota, MD & CEO, NPCI.
Traditional e-payment methods Unified Payment Interface App Free
Most electronic payments in India is facilitated through NEFT and RTGS.
In National Electronic Funds Transfer (NEFT), money transfers are made
via electronic messages. The bank details of the sender and the beneficiary
are linked using bank branch name and IFSC code. When a payment is
initiated, the payer’s bank sends a ‘message’ to its NEFT service centre. All
such messages are pooled every hour and the bank’s NEFT centre sends it
to the RBI, which initiates the transfer. The process typically takes a little
more than an hour and is available only during the bank’s working hours.
Unlike NEFT, in Real Time Gross Settlement (RTGS), fund transfers
handled on one-to-one basis. Large value transactions, typically over Rs.
2 lakhs, are carried out using this method. This is also done during
working hours.
Immediate Payment Service (IMPS) is a more recent form of fund
transfer that is gaining popularity. A user is given a 7-digit Mobile
Money Identifier (MMID) Code. The sender initiates payment using
mobile bank by giving the MMID code and registered mobile number of
the beneficiary. Most banks offer this service free-of-cost now. It is a
round-the-clock immediate payment service.
How does UPI work
Imagine buying grocery from a supermarket by paying cash. You
handover the cash, the biller hands you a receipt and the purchased good.
UPI is as simple as this. Instead of handing over the cash, you tell your
virtual identity to the cashier. The cashier generates an invoice through
UPI, you approve it using your mobile phone and the payment is made!
The Unified Payment Interface App Free is an improved version of IMPS.
Apart from a bank account, all that you need is a smartphone. Once you
register for UPI with your bank, a unique ‘virtual address’ will be created.
This is mapped with your mobile phone.
To initiate the payment, UPI invokes this virtual identity of the
beneficiary and transfers money in real-time. It works on single-click
2-factor authentication.
UPI will allow a customer to have multiple virtual addresses for
multiple accounts in various banks. In order to ensure privacy of
customer’s data, there is no account number mapper anywhere other
than the customer's own bank. This allows the customer to freely
share the financial address with others.
A customer can also decide to use the mobile number or Aadhaar
number as the name instead of the short name for the virtual address.
UPI can potentially eliminate the need for maintaining a mobile
wallet, as this ‘virtual address’ is not limited only to individuals. This is
a significant step towards moving into a cashless economy.
Source: http://bit.ly/2iEHUBI