India moves a step closer to becoming a cashless economy this month with the launch of unified payment interface (UPI), the brainchild of RBI governor Raghuram Rajan.
“For a number of years, we have been saying we need a revolution in banking in India. I think we can confidently say the revolution is upon us. What we have in India is the most sophisticated public payments infrastructure in the world,” Rajan said at the launch of the UPI.
What exactly is UPI?
It’s a secure and free way to transfer money instantly, any bank to any bank with contacts in your phone. It will allow users to pay for transactions as low as Rs 50 and go all the way up to Rs 1 lakh.
The UPI system will allow customers to send money and make payments almost as easily as sending a text message. Fund transfer will be possible 24*7, including sundays and public holidays.
It can be used in many day to day activities. To name a few:
How does it affect me?
Painful account numbers or IFSC codes are no longer required!
Further, no time will be wasted to add beneficiary as you just need one unique virtual payment address.
Rs. 0.50 per transaction will be charged. On your bank statement, it will appear as IMPS transaction.
What is this virtual address?
Think of it like a new & unique email ID for payments such as firstname.lastname@example.org or a mobile email@example.com
For example, if you want to receive or make payment through a particular bank account, you just have to give your virtual financial address (XYZ@sbi) to the other party.
Is it safe?
Absolutely!!! The new interface is built on the same infrastructure as the Immediate Payment Service (IMPS), which is currently used by banks for real-time transfer of cash. Similar to OTPs, UPI will have MPIN to authenticate the transactions, as mandated by RBI.
In case of a transaction failing, customers will be able to raise a complaint from within the app itself.
Some 21 banks have already enabled UPI on their own apps, some of which are already available on the Google Playstore; the iOS (Apple) version will come later. India being an Android country, UPI has rightly focused on getting the more important version first.
All in all, a great move to make cashless payments faster, easier and smoother for millions of people in India.
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