Unified Payments Interface (UPI)

India Fintech Success...

In a country like India, where a large population is still unbanked, the introduction of the Unified Payment Interface, or UPI was a game changer. UPI allowed people to use their smartphones as virtual debit cards and made it possible to receive and send money with just a few clicks.

"With the help of UPI, India took a major step towards becoming a cashless economy."

From a chaiwala to a Starbucks, a large section of our society has adapted to UPI. It actively utilizes the mechanism for seamless payments. Let's understand more about UPI –the launch of UPI, the benefits of UPI, how UPI works, and much more.

Who started UPI?

The National Payments Corporation of India (NPCI) launched UPI in collaboration with the Reserve Bank of India and the Indian Banks Association (IBA).
NPCI, which is identical to MasterCard and Visa, manages the RuPay payment system. It allows several banks to connect and transfer cash.
Another NPCI project is the Immediate Payments Service (IMPS).

UPI & IMPS- How are they different from each other?

When a client used IMPS services, the transaction was completed in a matter of seconds, but it also needed the consumer to enter banking data repeatedly, which was a time-consuming operation.

Furthermore, most banks' platforms (website or app) were inadequate. In summary, the UPI is a superior IMPS avatar.

What makes UPI unique?

Instantaneous money transfers are possible 24×7 using a mobile device.
Access to many bank accounts using a single mobile application.
A smooth single-click payment is offered together with two-factor authentication that is in compliance with regulatory requirements.
The customer's virtual address for Pull & Push offers additional security because they don't need to provide information like their card number, account number, IFSC, etc.
It eliminates the need for cash on delivery or even traveling to an ATM.
You may simply divide your bills among peers.
Payments can be done over the counter, through a barcode (Scan and Pay), or by utility bill payment.
You may make merchant payments or in-app payments with a single app.
Complaints may be sent straight from the mobile app.
You may quickly make donations, disbursements, and collections.

Furthermore, from June 8, 2022, the RBI will allow the pairing of RuPay credit cards with UPI. Customers may now make credit card payments using UPI in the absence of a physical card.

NPCI is developing a real-time functionality that will shorten the 24-hour time period required by banks to unlock money due to time-out or transaction decline to 30 seconds. This service went operational on September 20, 2022.

How does UPI work:

The following parties are involved in UPI transaction' processing:

NPCI (National Payments Corporation of India)
Sender's bank
Receiver's bank
Payer PSP
Payee PSP

How can I begin accepting UPI payments as a customer?

How to Register:

The UPI app must be downloaded from the App Store.
You may also make a profile by entering information such as your virtual ID (payment address), name, and password.
You may link the bank and account number with the virtual ID by going to the 'Add/Link/Manage Bank Account' option.

Creating a UPI - PIN:

You can choose the bank account from which you wish to make the payment and then proceed with any of the following options:

M-PIN generation and customization

The bank will send you an OTP to your registered mobile number.
You can input the last six digits of your debit card number as well as the expiration date.
Enter the OTP and your selected numeric UPI PIN, then click 'Submit.'
You will receive a notice after you click Submit.
Enter your old UPI PIN and new UPI PIN and then click 'Submit.'

Now, all you need to do to make a payment is input the amount and your UPI PIN and continue. Isn't that easy?

Benefits of UPI

UPI provides numerous advantages to banks, merchants, and customers, which are described below.

UPI Benefits for Banks

For a single transaction, there is universal applicability.
A single click is required for two-factor authentication.
It is more secure and safe.
It makes transactions simple.
Unique Identifier Basis for Payment Single

UPI Benefits for Merchants

Fund collection is simpler.
The virtual address of the consumer is not in danger.
This works for both m-commerce and e-commerce transactions.
Customers using Tap do not require credit or debit cards.
In-App Purchases (IAP)
It eliminates the inconvenience of cash on delivery.

UPI benefits for customers include

One application can access many bank accounts.
There is constant accessibility.
From the smartphone app, you can quickly file a complaint.
Utilizing Virtual ID safely

Other benefits of UPI

e-RUPI

e-RUPI or eUPI (electronic Rupee and UPI) was created in partnership with the Department of Financial Services, the Ministry of Health and Family Welfare, and the National Health Authority.
It becomes available on August 2, 2021. The goal of e-RUPI is to eliminate corruption by ensuring leak-proof delivery of welfare benefits.

Who may make use of this service?

The private sector might use the service for its own corporate social responsibility program (CSR).
e-RUPI is essentially an e-voucher based on a QR code or SMS string that may be delivered through a mobile phone.
e-RUPI will serve as a forerunner for future Central Bank digital currency (CBDC) launches by the RBI by revealing shortcomings in the national digital payment infrastructure.

RuPay-

With widespread acceptance at ATMs, POS devices, and e-commerce websites all throughout India, RuPay is the country's first indigenous card payment network. Anti-phishing security is provided by this extremely secure network.
It is emphasized by the name, which combines the terms "Rupee" and "Payment," that this is India's unique effort to accept card payments.
Initiating a "less cash" economy is accomplished with RuPay, according to the RBI.
Only by enticing each bank and financial institution in India to adopt cutting-edge practices and start accepting electronic payments would this be possible.

Types of cards issued by RuPay-

1.RuPay PMJDY-

Who is this card for?

People who have established accounts under the Pradhan Mantri Jan Dhan Yojana are given the card (PMDJY).

Benefits-

It was created to give consumers economical access to financial services including pensions, savings/deposit accounts, remittance, and credit insurance.

Personal accident death and complete disability coverage of up to Rs. 2 lakhs is also included.

2.RuPay Mudra Debit Card-

Who is this card for?

The RuPay MUDRA Card is available to recipients of Mudra Loans under the Pradhan Mantri Mudra Yojana Scheme.

Benefits-

The Pradhan Mantri Mudra Yojana Scheme is a cutting-edge product that offers the account holder a working capital facility in the form of a cash credit arrangement.
The MUDRA card may be used to get credits and make numerous withdrawals, allowing for effective and efficient management of the working capital limit.

3.RuPay PunGrain Debit Card -

Who is this card for?

People who have a PunGrain Scheme account are eligible to apply for the RuPay PunGrain Card.
In order to assist farmers all around Punjab, the Punjab Government created PunGrain, a scheme for purchasing grains.

Benefits-

could be utilized to take advantage of automated grain procurement services at the pun grain Mundis.

4.RuPay Kisan Credit Card-

Who is this card for?

Those farmers who are users of the Kisan Credit Card Scheme.

Benefits-

This was put into place to offer timely, need-based finance to farmers in order to help them with their non-farming requirements in a cost-effective way.

"Linking a RuPay credit card to the UPI platform involves connecting RuPay credit cards to the UPI network."

In accordance with the NPCI's statement, customers will profit from the additional opportunities to use their credit cards in this country, and businesses will profit from the growth in consumer spending by joining the credit ecosystem and accepting credit cards utilizing tools like QR codes.

Credit cards issued by RuPay will be linked with a Virtual Payment Address (VPA), or UPI ID.

Who can avail of the benefits-

Customers of Punjab National Bank, Union Bank of India, and Indian Bank will be able to use the RuPay Credit Card on UPI with the BHIM App initially in the initial phase.
Additionally, it stated that for up to a transaction amount of Rs 2,000 or less, there will be no merchant concessional rate (MDR) payable for this category.

Now let us understand how UPI and RuPay going GLOBAL!

"RuPay and UPI are in dialogue with other nations to become accepted globally."

Unified Payments Interface (UPI), RuPay, and even the BHIM app are being discussed by India with a number of other nations in order to allow payment processing within their national borders.

The Finance Minister responded in the affirmative when asked about establishing UPI in the United States by a student at the University of Maryland: "We are collaborating with several nations.

RuPay is now accepted in the UAE and Singapore, two countries that support the initiative.

Related Facts:

● In June 2022, the government-backed digital payments interface witnessed over 5.86 billion transactions totaling INR 10.14 lakh crore.
● UPI is now India's most used digital payments system, with 330 banks and an average ticket amount of INR 1,730 per transaction.

However, two years before this amazing figure became a reality on April 3, 2020, NPCI established a subsidiary firm named NPCI International Payments Limited (NIPL) with the purpose of making UPI a worldwide approved and used payment service.

With this, The UK (August 2022), Russia (August 2022), Bhutan (July 2021), Nepal (February 2022), Singapore (March 2020), Malaysia (August 2021), Oman (October 2022), Bahrain (October 2022), Saudi Arabia (September 2022), The UAE ( April 2022), and Europe (Belgium, the Netherlands, Luxembourg, and Switzerland, October 2022) have joined the UPI bandwagon.

Earlier this month, the NIPL reached an agreement with France's Lyra Network (June 2022) to accept UPI and RuPay Cards in the nation.

Aside from that, the NPIL has signed agreements with a number of institutions in Japan and China.

But why are NCPI And NIPL trying to take UPI international???

The primary purpose is to make transactions smooth and simple for Indians going outside of the nation.

The second reason is to support and manufacture a Made-in-India product that is widely available and well-known across the world.

The future of money is digital

In India, quick payments resulted in incremental cost savings of $12.6 billion in 2021, according to research by Cebr Economic Research.
The same factor contributed to India's economy producing $16.4 billion, or 0.56% of its GDP.

According to projections, UPI payments would increase India's GDP by $45.6 billion, or 1.12%, by 2026.

"The future of money is digital, and this is something that moves to integrate credit cards with UPI and other projects very clearly. India's widespread adoption of UPI serves as a case study for the rest of the world since it has solidified its position as a pioneer in digital payments."

NO ATM CARD?

DON'T WORRY! This new UPI ATM will solve your problem Bharat's first UPI-ATM was launched on 5th Sept 2023 by Hitachi Payment Services in collaboration with the National Payments Corporation of India (NPCI)

The UPI-ATM allows customers to withdraw cash from any ATM that supports UPI without the need for a physical card

To use the UPI-ATM, customers simply need to select the "UPI cash withdrawal" option at the ATM & and enter the desired withdrawal amount that's it!

Features of the UPI-ATM

The service allows seamless card-less transactions
Individuals do not need to carry their debit/credit card for making cash withdrawals from ATMs
It will allow users to withdraw cash from multiple accounts using the UPI app
The transaction limit of this facility is up to Rs. 10,000. However, it may vary from bank to bank. The limit is covered under the total transfer limit through UPI every day (Rs. 1 Lakh).
Two-step verification is used to help add security and reduce the chances of fraudulent transactions

How to Withdraw Cash at ATM using UPI-A:

1: At the ATM, select ‘UPI cash withdrawal’ option

2: The ATM will ask you to enter the amount that you want to withdraw

3: You will be prompted with a single-use QR code on the screen

4: Scan the started QR code on the screen using any UPI application on your mobile

5: Authorize the transaction. UPI will be debited upon authorization

6: On the ATM, tap on ‘Press here for cash’

7: Your cash will be dispensed

Three new UPI features-

Some brand new features were recently added to the UPI Network.

Here’s what you should know about them,

First is Hello UPI !, using which you can make UPI payments just with the help of your voice.
Next is UPI Lite X using which you can send or receive money even while being offline, using the NFC or Near Field Technology.
Another cool feature using the same NFC Technology is UPI tap and pay, using which you can make payments by simply tapping the NFC-enabled QR codes.

Maximum Withdrawal through UPI-ATM-

As per the initial arrangements, a maximum of Rs. 1 Lakh every month can be withdrawn as one can carry out a transaction only up to Rs. 1 Lakh through UPI every month. It also has an upper capping of Rs. 10,000 every day. However, if one uses the same account for other UPI transactions, the overall withdrawal limit would decrease accordingly.

Fees and Charges-

Customers are allowed to carry 5 transactions (including financial and non-financial transactions) in a month from their own bank ATMs. They are also eligible to carry out free transactions from other bank ATMs (including financial and non-financial transactions) i.e. three transactions in metro centers and five transactions in non-metro centers. Thereafter, customers will be charged Rs. 20 per transaction.

India's Largest Bank launch UPI now, Pay later:

To use UPI now, Pay later you need to first activate the feature with your bank.

The amount will be deducted from the credit line, and you will be enable to make the payment even.

HDFC UPI Now, Pay Later and ICICI Pay Later have already launched credit lines that allow customers to use their credit lines for UPI transactions.

Both banks have allowed a credit line of up to Rs. 50000 per user as per income and credit history.

How to Reverse UPI Payment made to the wrong ID/Address

In case you have transferred money to the wrong UPI ID, the first thing to do is report the transaction to the customer service of applications such as Paytm, Google Pay, and PhonePe.

Contact customer support: Reach out to your bank's or UPI service provider's customer support immediately. Furnish all relevant details, including the transaction reference number, date, and amount. This information is vital for initiating the reversal process. After that, you should explain the mistake and then wait for the customer support team to initiate the inquiry, get approval for reversal, and then credit that back to you.

As per NPCI, “Every end-user customer can raise a complaint with respect to a UPI transaction, on the PSP app / TPAP app. End-user customers can select the relevant UPI transaction and raise a complaint in relation thereto. A complaint shall be first raised with the relevant TPAP with respect to all UPI-related grievances/complaints of the end-user customers on-boarded by the PSP Bank / TPAP (if the UPI transaction is made through the TPAP app). In case the complaint/grievance remains unresolved, the next level for escalation will be the PSP Bank, followed by the bank (where the end-user customer maintains its account) and NPCI, in the same order. After exercising these options, the end-user customer can approach the Banking Ombudsman and/or the Ombudsman for Digital Complaints, as the case may be. The complaint can be raised for both types of transactions i.e. fund transfer and merchant transaction. The end-user customer shall be kept communicated by the PSP / TPAP by means of updating the status of such end-user customer’s complaint on the relevant app itself.”

-You can also file a complaint at the NPCI portal through the Dispute Redressal Mechanism tab.

-You will have to mention the issue, transaction details, mail ID, and registered mobile number.

-You will see an incorrectly transferred to another account option.

-You also have to upload your bank account statement and submit the complaint.

Unified Payments Interface (UPI)

India Fintech Success...

M-PIN generation and customization