AS THE government pushes for cashless transactions, five public sector banks are yet to join the Unified Payment Interface (UPI) network, an ambitious fund remittance service backed by the Reserve Bank of India and the government.
State Bank of India, which controls 25 per cent of the banking business, launched its UPI app SBI Pay only on November 24, nearly three months after UPI went live in August-end and two weeks after the demonetisation announcement. HDFC Bank, ICICI and Axis launched their own UPI-based apps before SBI.
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While digital payment platforms including Paytm, FreeCharge, MobiKwik and RuPay have witnessed significant surge in downloads as well as transactions, Indian Overseas Bank, Indian Bank, Syndicate Bank, Corporation Bank and Punjab & Sind Bank have not joined UPI.
“They should come on board. I don’t know why they have not yet joined,” said A P Hota, Managing Director of National Payment Corporation of India (NPCI), which launched UPI.
Thirty banks had already signed up with UPI, Hota added, including foreign banks like HSBC. It’s aiming for one million transactions by the year-end.
“UPI is the combined initiative of the banking industry in India and supported by the RBI. The demonetisation period is a good time to push digital banking platforms like UPI. The government should ask five PSU banks to go for UPI,” a banking source said.
An advanced version of Immediate Payment Service (IMPS), a round-the-clock funds transfer service, UPI seems to have overcome teething problems and has started targeting more merchants and customers. After demonetisation, daily transactions have jumped from 6,000-7,000 to 20,000 now.
“IMPS is already clocking 1.2 million transactions. UPI and IMPS together will have over 2 million transactions by March-end. Demonetisation will be a game-changer,” Hota said.
Adding that the UPI platform has already attracted 160 merchants, he said, “We are hopeful that big e-commerce companies will join soon. Flipkart has already done the preliminary test. We are waiting for Amazon to join. Once Amazon joins, it will give a big boost.”
“Our UPI offering aims at providing a channel agnostic collection solution to corporates, which will enable them to drive sales through increased digitisation of flows,” said Divyesh Dalal, Country Head of Global Liquidity and Cash Management at HSBC. “Given the enhanced coverage, interoperability and cost dynamics, we expect the acceptance of UPI-based payments to increase over time.”
UPI facilitates ‘virtual address’ as a payment identifier for sending and collecting money and works on single-click two-factor authentication. It also provides an option for scheduling push-and-pull transactions for various purposes like sharing bills among peers.
Customers can use the UPI app instead of paying cash on delivery on receipt of product from online shopping websites. They can use UPI for expenses like paying utility bills, over-the-counter payments, barcode-based payments, donations, school fees etc.
UPI offers a facility to identify a bank customer with an email-like virtual address. A customer can have multiple virtual addresses for multiple bank accounts. In order to ensure privacy of a customer’s data, there is no account number mapper anywhere other than at the customer’s own bank. This allows the customer to freely share the financial address with others. A customer can also decide to use the mobile number as the name.
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