The Indian National Payments Corporation of India (NPCI) has recently announced that Unified Payments Interface (UPI) application has become operational in India. This payment gateway became operational post receiving the Reserve Bank of India’s (RBI) clearance allowing the banks’ UPI applications to set out live on the Google Play Store. Initially, the UPI will be available only on the Android mobile operating system. It will be going live with 21 banks in the first phase.
UPI will provide uniform mobile payment system by leveraging digital trends such as increasing smart phone adoption and deeper penetration of mobile data. It will allow customers to send and receive money from their smartphones using virtual payments address without entering bank account details. It facilitates ‘virtual addresses’, as a single payment identifier for sending and collecting money and works on single click 2 factor authentication.
UPI is a flagship product of NPCI that will help India to move towards a cashless economy. It is a set of standard Application Programming Interface (APIs). Importantly, NPCI, founded in 2008, is the umbrella organisation for all retail payments system in India. It is being promoted the Reserve Bank of India. NPCI has been working on UPI since February 2015 under the guidance of Nandan Nilekani, co-founder of Infosys and former chairman of the Unique Identification Authority of India (UIAI). Earlier, NPCI has successfully played pioneering role in the development of a domestic card payment network called RuPay, reducing the dependency on international card schemes.
No doubt, this Unified Payment Interface document provides a payments architecture, which is directly linked to achieving the goals of universal electronic payments, a less cash society, and financial inclusion, using the latest technology trends, laid down in the RBI Payment System. Many consider this as a parting gift, from Raghuram Rajan, which will turn one’s smartphone into a bank!