RBI pushes for UPI: electronic wallet for small transactions, phone payment features

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Mumbai: The RBI’s big push for the Unified Payment Interface (UPI) has the potential to push transactions on the platform to 100 crore per day, according to the chief executive and CEO of the National Payments Corporation of India ( NPCI), Dilip Asbe. Two of the key steps include enabling small transactions through an ‘on-device’ e-wallet in UPI apps, which locks funds in a separate account, while the other is to enable UPI payments on multifunction phones. .
UPI transactions topped 400 crore per month, largely thanks to transactions in small towns where the lack of other electronic payment infrastructure makes it easier to send and receive money. The downside of UPI is that every small transaction, including an Rs-5 payment, is treated as an electronic withdrawal from a bank account. This forces both the issuing and receiving bank to send an SMS and is reflected as a debit entry in passbooks and statements. More than that, the real cost is the load it places on core banking systems, as every payment message has to reach two banks’ server for the transaction to complete.

While the details are not yet clear, people in the industry say that an on-device e-wallet would require the owner to transfer money from their bank account to the UPI e-wallet in the app. The money thus blocked can be used to make small-amount payments without the payment message having to pass from the telephone to the payer’s bank server and to the recipient’s bank server before being confirmed to the recipient. Bankers compare it to the prepaid card used in transportation like the metro, except that it will work with any UPI provider. An on-device e-wallet will also reduce reliance on telecommunications networks as, in the future, customers will be able to use NFC to transfer funds from their UPI e-wallet on the device to the recipient’s device.
The RBI has also enabled banks to facilitate the payment of IPO subscriptions and the purchase of government bonds from the central bank up to Rs 5 lakh – an increase from the current level of Rs 2 lakh . Announcing the installation, RBI Governor Shaktikanta Das said IPO requests of Rs 2-5 lakh constitute around 10% of subscription requests. The transaction limit in the UPI system has been doubled from Rs 1 lakh to Rs 2 lakh in March 2020. The new limit will allow clients in small towns to make large investments in stocks and government bonds in the future. using their cell phone.
While previous attempts to promote the use of multifunction phones for payments have not been successful, innovations under the umbrella of the RBI regulatory sandbox have addressed the complexity issues that users have been experiencing. faced. The proposal is to now allow users to authorize payments on multifunction phones by entering codes or dialing a number and providing the required entries.
The RBI’s action on UPI comes at a time when the government is trying to globalize the network by identifying partners in key markets like the UAE, Singapore and the UK for acceptance and at the same time providing the technology. from the UPI platform to other markets.


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