From Jan DhanYojna to Adhaar – based on Direct Cash Transfer schemes, the Indian Government is taking several measures to digitalize the Indian economy. The Reserve Bank of India (RBI) has also announced its Unified Payment Interface (UPI), which could be a game changer in the current era of cashless payments.
A couple of months ago, RBI Governor RaghuramRajan launched UPI, the ambitious payments architecture for instant online bank payments. The interface has been developed by National Payments Corporation of India (NPCI), which is an umbrella organization for the country’s retail payments. UPI aims to allow users to send and receive money, make utility payment and more using a single password and identification. Let’s dwell a little deeper to know more about UPI and its benefits.
UPI is built on top of IMPS, the money transfer takes place immediately. Once you have the unique ID, simply open the app, enter the amount to be paid, the beneficiary’s unique ID and hit ‘send’ – it is that simple! In order to initiate safe transaction, the app will also ask you for a mobile pin to authenticate the payment.
Now, the question will arise that how UPI will be different than Paytm and other such facilities. A major difference between UPI and an app such as Paytm is that the latter is a semi-closed mobile wallet. This means that only parties registered in that ecosystem can transact with one another. UPI, on the other hand, is interoperable between banks.
But is it secure? Security was the prime consideration for NPCI in creating the app. It has to provide strong, end to end security and data protection. The use of a mobile phone as the authentication device, virtual payment addresses and portable third-party authentication schemes such as Adhaar can help banks save on the cost of building their own authentication structures, and focus on their core business.
Mobile payments just got leg-up, thanks to the Unified Payment Interface (UPI), probably the only app of its kind in the world. A dedicated team from NPCI is working on developing the app and coordinating with tech teams of the various banks like ICICI bank, Citibank, SBI, Punjab National Bank, etc. to make it a reality.
With an aim to inculcate a digital culture, the Government is leaving no stone unturned to evolving the digital landscape. Yes, with a hope that now the change is inevitable, the Government has launched DigiShala – free channel in Doordarshan DTH Channel to educate people on the use of all cashless and plastic cards payment methods such as UPI, Adhaar-enabled payments system, online wallets as well as debit and credit cards. Along with the DigiShala, the Government has also launched Cashless India website (www.cashlessindia.gov.in) that will serve as a knowledge hub for all cashless initiatives.
All these initiatives are taken up to establish foundations to build trust and to keep the pace with the evolution so that every Indian citizen can happily embrace the digital age.