RBI’s Unified Payment Interface Is Now Live: This Is How it Works for Customers
NPCI launches Unified Payment Interface platform; 21 banks will soon make mobile applications available on Google Play Store.
The National Payments Corporation of India (NPCI) has launched the platform for its Unified Payment Interface, it said in a release on Thursday. Soon, the 21 banks that are currently on board will launch their mobile applications on the Google Play Store.
The United Payment Interface, or UPI, is a system that allows for instantaneous transfer of money using what NPCI, the developer, calls a virtual payment address. In April this year, when the system was unveiled at the Reserve Bank of India by Governor Raghuram Rajan, it had been announced that 36 banks had signed up to be part of UPI.
However, as of now only 21 are ready to go live. Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Catholic Syrian Bank, DCB Bank, Federal Bank, ICICI Bank, TJSB Sahakari Bank, Oriental Bank of Commerce, Karnataka Bank, UCO Bank, Union Bank of India, United Bank of India, Punjab National Bank, South Indian Bank, Vijaya Bank and YES Bank are expected to launch their mobile applications by the end of the week.
IDBI Bank and RBL Bank have provided their customers an option to link their accounts to any UPI-linked mobile application, and thereby use the interface.
“Two large banks, which are currently not in the system are State Bank of India and HDFC Bank,” said AP Hota, managing director and chief executive officer of NPCI in a telephonic interview with BloombergQuint.
Hota claims that the two banks, along with 13 others are expected to launch their mobile applications by September 30.
How it Works
The first thing you need is a smartphone. The next step is to download the mobile application.
You do not necessarily have to use the mobile application of the bank where you have an account. For example, if you have an Axis Bank account, you could download a Union Bank of India mobile application if you like the features better.
Once you do, you link your bank account (it must be in one of the 21 banks currently on board) to the mobile application and create a unique identification or a virtual payment address. This identification could even be your mobile phone number.
You will also have to create an “m-pin”, a security code, that will authenticate a transfer of funds.
Once you’ve done that, all you need is the unique identification of the person to whom you’re transferring the money. You enter the amount you want to transfer, the virtual payment address of the recipient – for example, 123456789@Axis – enter your pin code, and the money is transferred immediately.
The current daily limit for money transfers on the application has been set at Rs 1 lakh, but it could be set higher later.
The Drawbacks
If you are an account holder in HDFC Bank, State Bank of India, or another bank not in the list of 21 released by NPCI, you’re going to have to wait a while longer. Either your bank will have to launch an application, or like IDBI Bank and RBL Bank, they’ll have to give you the option to link your account with one of the 21 banks’ mobile applications.
A second drawback is that none of the banks are expected to launch an application for the Apple Store in the near term. According to Hota, the banks are looking to initially cater to the majority, and will only launch applications compatible with Apple’s iOS six months from now.
What’s Next?
According to Hota, Phase 2 of the rollout of UPI will be much more exciting. It will allow for integration of various other payments.
“There would be customised payment solutions like bill payments,” Hota said.