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National Payments Corporation of India (NPCI), the umbrella organization for all retail payment system in India, has taken up a new initiative of implementing “Unified Payment Interface” to simplify and provide a single interface across all systems. The new interface is designed to enable all account holders to send and receive money from their smartphones with a single identifier – Aadhaar number, mobile number, virtual payments address – without entering any bank account information.
Key drivers of UPI (Unified Payment Interface):
UPI will make possible paying and receiving payments as easy as swiping a phone book entry and making a call on mobile phone
Everyone who has an account should be able to send and receive money from their mobile phone with just an identifier without having any other bank/account details
This unified layer should allow application providers to take advantage of enhancements in mobile devices, provide integrated payments on new consumer devices provide innovative user interface features, take advantage of newer authentication services, etc.
This allows banks and other payment players to focus on core business and allow half a billion phones to be the primary payment device in conjunction with other 3rd party authentication.
“This unified layer, which offers next generation peer-to-peer immediate payment just by using personal phone, uses existing systems such as IMPS, AEPS, to ensure settlement across accounts. The usages of existing systems ensure reliability of payment transactions across various channels,” says A P Hota, MD & CEO, NPCI.
NPCI presented a Live demo transactions involving a few select banks during the event, which was inaugurated by Chief Guest, Dr Raghuram Rajan, Governor, RBI and attended by Shri Nandan Nilekani, ex-Chairman, UIDAI; Smt V R Iyer, CMD of Bank of India; Shri Balachandran M, Chairman, NPCI and Shri A P Hota, MD & CEO, NPCI.
UPI is a standardized, innovative, adoptable, secure and cost-effective interface. Once formulated, the standardized API, designed for enabling different forms of payment beneficial for mobile application, and other channels, can be integrated into the NPCI infrastructure.
UPI will make payments possible only by providing an address with others without having ever provided account details or credentials on 3rd party applications or websites. It also has ability for sending collect requests to others (person to person or entity to person) with "pay by" date to allow payment requests to be “snoozed” and paid later before expiry date without having to block the money in the account until customer is ready to pay.
UPI has the ability to use personal mobile to "pay" someone (push) as well as "collect" from someone (pull). User can pre-authorize multiple recurring payments similar to ECS (utilities, school fees, subscriptions, etc.) with a one-time secure authentication and rule based access. All payment system players to use a standard set of APIs for any-to-any push and pull payments.
In addition, ability to pay and collect using "virtual payment addresses" that are "aliases" to accounts that may be payee/amount/time limited providing further security features. It has ability to have PSP provided mobile applications that allow paying from any account using any number of virtual addresses using credentials such as passwords, PINs, or biometrics (on phone).
NPCI was set up in April 2009 with the core objective of consolidating and integrating the multiple payment systems into nation-wide uniform and standard business process for all retail payment systems and for facilitating an affordable payment mechanism to achieve financial inclusion across the country. NPCI has since completed several payments system projects including ATM switching, mobile payments, cheque truncation system, PoS switching, 24x7 remittance system called IMPS, Aadhaar based Payments and RuPay.