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Unified Payment Interface : Revolutionary step toward Cashless Economy

"A Banking Revolution is upon us" said Raghuram Rajan, Governor RBI , while flagging of Unified Payment Interface."Revolution"  might seems like  word with  an element of magic about it, and it may ill-fits in Indian banking system currently with its load of bad loans. 


But, governor wasn't exaggerating. The UPI can, in a very short time, make a huge difference to the way Indians pay one another. 

What is UPI?

Unified Payment interface or UPI will allow customers to instantaneously transfer funds across different banks with the use of a single identifier which will act as a virtual address and eliminate the need to exchange sensitive information such as bank account numbers during a financial transaction.

"UPI will make payment systems fully interoperable across all players without having silos and closed systems, by enabling one-click for two-factor authentication," Vivek Belgavi, Leader Financial Services Technology PwC India.

UPI Architecture

UPI Architecture as described by NPCI


The UPI is a system for instant, online bank payments.


Value of UPI

UPI is a cheap, secure, reliable, mobile-first, interoperable, open-source, instantaneous settlement and both pull and push platform, according to a note by Bengaluru-based technology product start-ups thinktank iSpirt.

Moreover, while pre-paid wallets can’t do more than Rs.10,000 worth of transactions without KYC (know your customer) norms in a given month, a UPI-enabled platform bank account can transfer up to Rs.1 lakh instantaneously.

Besides, the cost of each transaction is going to be less than Rs.0.45, and one can also factor in all the savings from, and to, bank accounts. 

Benefits of UPI :

1. Reduce need for e-wallets:

UPI is set to allow you to make payments using your mobile phone as the primary device without the need for you to download an app to send or receive money.

Hence, you may no longer need an e-wallet if convenience is your primary focus for using the product. Also, you will be able to use multiple e-wallets seamlessly as they will become inter-operable with UPI.

2. No need to disclose identity while making payments:

Sample this. If you want to settle your bill with the cab driver at the end of the journey, you just have to give your virtual address and the driver will request money from it. Sure, the system will check with you.

You will get a message on your mobile phone asking for authentication.

Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require you to share bank details with either the driver or the cab service provider. Also, since UPI runs on Immediate Payment Service (IMPS) platform, the service will be available real-time and 24x7.

3. Use any bank product:

UPI will make the payment system inter-operable. Hence, you will be able to use the products of any bank, even if you are not a customer, which has entered into an agreement to use the UPI platform.

4. One-click, two-factor authentication:

And finally, UPI enables a two-factor authentication in one click. So far, for a two-factor authentication, you have to click multiple times. With UPI, you will be able to do it at one click. This system will allow for a one-click, two-factor authentication on mobile phones across bank accounts.

We will Publish more article on UPI here, till then be safe and keep reading

Shrey Kapoor is a Tech-Enthusiast and Founder of Techphlie.com, which is one of the India's Top Tech News Website.Even Forbes and many other renowned publishers took his articles reference .Shrey is a social media analyst, strategic thinker and creative writer who is passionate to deliver the best, latest possible Tech-News to his followers and subscribers.

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