Is UPI the way to kill ‘CASH’ obsession in India?

Unified Payment Interface (UPI)

Decoding the Term-

UPI or Unified Payments Interface is a revolutionary Payment Method connected to leading banks to carry out transactions between two parties launched by the National Payment Corporation of India (NCPI). As a payment interface, UPI seeks to transform India into a Cashless Economy. UPI allows an individual to receive and transfer funds without entering or storing their account details and the related card information, simply by acting as a unique identifier. As a Mobile Interface, it has been designed to carry out transactions using the IMPS or the Immediate Payment Services which has been found to be faster than NEFT and works around the clock. Unified Payments Interface aims at encouraging non- cash transactions, which stand at mere 6 transactions per person in a year.


Benefits UPI carries-

Unified Payments Interface acting as a single interface to operate multiple bank accounts and carry out speedy transactions, has a wide array of benefits to offer-

  • Since UPI is a Government of India initiative, the transaction costs will be significantly lower ranging from Rs. 0.50 to Rs. 5 as compared to what we incur at present while using international platforms in the face of Visa or MasterCard.
  • With the taboo about online payments and sharing account details, e- commerce development has lagged behind in the country. UPI aims at changing this retardation. By acting as a Unique Identifier, UPI will eliminate the need to share account details and is likely to provide the much needed boost to Online Markets.
  • UPI ultimately aims at building a cashless economy which is seen as environmentally beneficial due to a significantly reduced demand for paper money.
  • UPI has been designed to provide a single point of contact for all digital transactions, thereby making the complex process hassle free by streamlining and simplifying it.
  • The Enhanced Security that UPI provides is likely to release the apprehensions that people associate with online transactions. The Two- Factor Authentication process aims at ensuring high security without revealing any personal financial details.
  • An added that sets UPI apart is its high transaction limit. Whereas regular mobile wallets allow a maximum transaction of Rs. 10,000 without KYC norms, Unified Payments Interface offers a transaction limit of Rs. 1 Lakh instantaneously.

How Unified Payments Interface Works?



Freeing the users from the shackles of entering bank details including the account number, IFSC code etc, Unified Payments Interface will facilitate account holders to carry out transactions using the Aadhar Unique Identifier Number, their Mobile Number or the Virtual payments address. All the banks connected with this service will provide their customers with a Virtual ID unique to each customer which will act as your local address. Any transactions to be carried out will take place via this virtual ID and authenticated by the user using a password.

For instance, whenever you avail any service, at the end the service provider (using Unified Payments Interface) will request the payment from your virtual address that the bank provides you with. Once the payment has been requested, you will get a notification on your phone about the same. To complete the transaction, you will authenticate the payment using your password and the process will be done. This whole process will not require sharing of any information between you and your service provider, except your virtual address.

We at Recro have been waiting for the release of UPI and have capabilities of integrating it into the Mobile Apps we develop and make transactions in Mobile and Web seamless.

The Road Ahead

The future of Unified Payments Interface is likely to affect the future of various Mobile Wallets. RBI has made UPI available only to banks which were on the losing end in the era of mobile wallets. These wallets have been urging to integrate UPI as a part of their services, however, as of now; no positive step has been taken in this direction. But UPI sweeping overall digital transactions seems unlikely, so long as the mobile wallets continue to attract the users with lucrative offers and cash backs.

To cut a long story short, UPI is all set to bring about a new era of cashless transactions in a streamlined and simplified manner with greater security and increased benefits.




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