The Only Payments App You Need

De-monetisation has affected us all irrespective of caste, creed or religion. For once, the whole country is united. Whether they support the move or not, everyone agrees that it could have been implemented better.

While those in cities have been at the lesser end of sufferings, reports suggest it is a totally different scenario in the rural India. The only ones who have potentially benefited seem to be the mobile wallet companies. Some even saw exponential growth in the number of transaction happening on their platforms.

Rants aside, we all have been finding ways to accommodate this forceful transition to a less cash economy one way or the other. There is no doubt that mobile wallets have somewhat helped manage the situation. But there is a slight issue.

The Problem

Wallets need to be recharged. You need to first add money into your wallet before performing any transaction. That’s extra work if all you want is to recharge, or send and receive money. Even the wallets maintained by banks have the same issue.

Then there is the issue of multiple wallets out there and lack of interaction between each other. For example, you can’t do transactions between Paytm or MobiKwik or any other e-wallet for that matter.

The Solution

In the month of April, National Payments Corporation of India (NPCI), came out with brand new payment platform called the United Payment Interface (UPI).

As revolutionary as it is, it got very less fanfare. In fact, serial internet banking users didn’t know about this up until recently.

What UPI does is ditch that extra step of adding money to your wallet. It allows instant transfers between bank accounts across any bank. Money stays in your bank account.

Moreover, it removes the hassle of the need to know the other person’s bank account details, as each person is given a username (e.g. user@bank) kinda thing which is called a Virtual Private Address (VPA). This, you need to setup once and its done. No more adding beneficiary and waiting for approvals and all those hassles.

Following are the advantages of UPI as posted in NPCI’s website:

Benefits for banks:

1. Single click Two Factor authentication
2. Universal Application for transaction
3. Leveraging existing infrastructure
4. Safer, Secured and Innovative
5. Payment basis Single/ Unique Identifier
6. Enable seamless merchant transactions

Benefits for end Customers:

1. Round the clock availability
2. Single Application for accessing different bank accounts
3. Use of Virtual ID is more secure, no credential sharing
4. Single click authentication
5. Raise Complaint from Mobile App directly

Benefits for Merchants:

• Seamless fund collection from customers — single identifiers
• No risk of storing customer’s virtual address like in Cards
• Tap customers not having credit/debit cards
• Suitable for e-Com & m-Com transaction
• Resolves the COD collection problem
• Single click 2FA facility to the customer — seamless Pull
• In-App Payments (IAP)

Conclusion

It makes the digital payments safer and convenient. Kudos to NPCI and RBI for such an effort.

Google CEO Sundar Pichai, in a recent interview mentioned about this type of platform being unique to India.

“…These things can have tremendous multiplicative effects for a place like India. This country has a chance to leapfrog some things other countries have struggled with.We’re doing it with cellphones instead of landlines. Similarly , in digital payments, the UPI stack in India is phenomenal. Something like that doesn’t exist in most countries. I do think we have a unique opportunity. There is a lot more infrastructure here than people realize…”

Now, that’s something we can seriously be proud about.

Also, since it isn’t tied to any specific bank, there is no single app for using this platform. You can use the UPI app of any bank that works best for you irrespective of what your home bank is.

Go ahead and try it. Don’t hesitate to clarify and ask for help if need be.

Happy New Year!