Have to pay your autowallah but cannot find any ATMs around? There is no one to give you change? Fret not. The Unified Payments Interface (UPI) is changing the way payments are being made in the country by simplifying the money transfer process.
Generally, transferring money from one account to another requires the account number and IFSC code of the payee and there was also a need to register the beneficiary. Now, there is no need for this cumbersome process. With UPI, all you need is a virtual identity, which is similar to an email id, and the same can be used to transfer money from one account to another at the tap of a button on your smartphone. This is very similar to IMPS money transfer, where the fund transfer is carried out on a real-time basis and instantly.
UPI offers customers an economical, speedy, convenient, and secure payment experience. This is unmatched ease and it is almost like carrying you bank around in your pocket through the smartphone. The main advantage of this form of payment is, it eliminates the need to carry cash around and helps people embraced the cash to digital transition in an effortless, smooth and efficient manner.
In July this year, the number of UPI transactions increased by more than 10%, to reach 11.63 million, according to data released by the National Payments Corporation of India (NCPI). The volume of UPI transactions have only been increasing and it is becoming one of the most popular types of payment methods in the country. More and more banks are integrating with the UPI as part of their digital payments initiative.
Let us understand more about how UPI will change the way we make payments in the country. Will the UPI give competition to mobile wallets?
UPI Versus Mobile Wallets
There are many banks that have integrated with UPI and this service is already available through the respective bank apps. Unlike e-wallets, there is no need to load money if one is using UPI, all you need to do is to make payment through the linked bank account. UPI offers customers the ease and flexibility when compared to mobile wallets.
One of the biggest benefits offered by the UPI interface is that it allows a user complete interoperability: you can send funds with a simple virtual id and there is no need to fill out lengthy bank information and remember different passwords. The reach of UPI is expanding and more and more banks are embracing this without second thought.
When you take wallet based transactions, there is firstly the need to load money into the wallet account and in UPI this is not necessary because transactions are carried out through the bank account only. In e-wallets, even for small transactions, the customer will have first to recharge his/her wallet and then again send money through the same wallet to whomever the payment has to be made. If UPI is used, the customer can directly make payment by using the virtual address.
For UPI, there is no need to remember multiple passwords, there is just one UPI pin that a user will have to remember.
Benefits of Mobile Payments
Be it UPI or mobile wallets, one cannot deny that they both offer customers the ease and convenience without having to carry around cash. Lets us understand some of the advantages of mobile-based payments:
- One of the main advantages of any kind of mobile-payment is that it allows the customer to make contactless payments.
- Payments can be secure and safe
- There is no need to carry around cash or search for ATMs
Advantages of UPI
- Eliminates need for e-wallets: UPI will allow you to directly make payments into the bank account of the other person. This will change the way payments are being made in the future.
- No identity disclosure: You will not have to disclose any type of personal bank details. For, example, if you have to pay a cab driver, all you need his the virtual address.
- Use any bank app: With UPI, payments are inter-operable and hence you can use any bank app. If if you are not a account holder of the bank, the UPI platform can be used.
- One click: With UPI, one of the main advantages is a one-click payment mechanism. Payments can be made at the click of a button without any hassle.
The UPI interface is most likely to change the way mobile payments are being made in the country. UPI is the NCPI’s most sought after project, which offers customer a quick digital solution in today’s world. There are many UPI-enabled banks in the market and the latest is Tez, which is customized for the Indian market and is available in 7 Indian different languages. Unlike other payment wallets, one need not load money in the Tez app.
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