Unified Payments Interface (UPI) transactions crossed the 10 billion mark in August, the National Payments Corporation of India (NPCI) said. UPI is an instant payment system that allows users to instantly transfer money to any bank account.
According to the NPCI data, the UPI transactions on August 31 stood at 10.58 billion. In value terms, the transaction had totalled Rs 15.76 lakh crore. The number of UPI transactions in July was 9.96 billion, up from 9.33 billion in June. In value terms, the transactions in July totalled Rs 15.34 lakh crore.
What is Unified Payments Interface (UPI)?
• Before 2016, India used a number of different systems to transfer money between banks. The traditional forms included National Electronic Funds Transfer (NEFT) and Real-Time Gross Settlement (RTGS). With the plethora of systems, rules and growing paper burden, there was a need for a unified system that could automate and standardise India’s payment platforms.
• In 2016, the National Payments Corporation of India (NPCI) set out with a mandate to change the face of India’s payment systems. It developed the Unified Payments Interface (UPI) as an architecture framework with a set of standard Application Programming Interface (API) specifications to facilitate online payments.
• The aim was to simplify and provide a single interface across all NPCI systems, thereby creating interoperability and a superior customer experience.
• The pilot programme, with 21 member banks, was launched on April 11, 2016.
• The UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood.
• It also caters to the “peer-to-peer” collect request which can be scheduled and paid as per requirement and convenience.
• It facilitates immediate money transfer through mobile devices round the clock.
• The UPI has emerged as the preferred mode of digital payment by offering free, fast, secure and seamless experience.
National Payments Corporation of India
• National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India. It was founded in 2008.
• Considering the utility nature of the objects of NPCI, it has been incorporated as a “Not for Profit” company, with an intention to provide infrastructure to the entire banking system in India for physical as well as electronic payment and settlement systems.
• The company is focused on bringing innovations in the retail payment systems through the use of technology for achieving greater efficiency in operations and widening the reach of payment systems.
• NPCI, during its journey, has made a significant impact on the retail payment systems in the country.
