The Reserve Bank of India governor Raghuram Rajan and the National Payments Corporation of India (NPCI) on Monday launched a Unified Payments Interface (UPI) programme, which makes mobile payments swifter and simpler. The UPI app will be inter-operable across multiple banks and allows customers to make or receive payments through a single identifier like the Aadhaar number or a virtual address.
Hence a person can use the product of any bank, without being a customer of a specific bank. UPI enables a two-factor authentication in one click.
The UPI app in phase-I, at present, is operational for a closed user group, which includes banks and various technology platforms involved in the setting up of the application. Gradually more banks will be brought into the system. The app is expected to be launched for the public in the next two months, an NPCI official said, declining to be named.
NPCI is a primary body governing all retail payment systems in India. At least 30 banks in India have concurred to provide the UPI service to their customers.
“I have said the Indian banking system needed a revolution. The revolution is upon us.” Rajan told the gathering. “The country has the most sophisticated public payment infrastructure in the world, which can be accessible to anyone who enters the system.”
“Our focus is in line with RBI’s vision of migrating towards a less-cash and more digital society,” said AP Hota, managing director and CEO of NPCI.
Mobile banking and online shopping has risen sharply in India’s urban regions in recent years. But Rajan warned that the UPI will need to deal with issues involving customer grievances, security breaches and fraudulent transactions. “There is still some way to go,” Rajan said.
ICICI Bank’s managing director and CEO Chanda Kochhar said: “UPI will revolutionise payment systems and payment habits in our country.” E-commerce giant Flipkart co-founder Sachin Bansal said that while shopping habits have evolved rapidly, the payments picture is not completely clear. “Concepts like cash on delivery and mobile wallets have been interim [payment systems] and never long-term solutions.”