Unified Payment Interface (UPI)
The Reserve Bank of India (RBI) on April 11 has launched Unified Payment Interface (UPI), which will make money transfer as simple as sending a text message. In the first phase, which will start next week, 29 banks will operate the platform. It will be inter-operable across different banks and will allow instant payments.
This UPI method could change the micro-payment landscape in the country.
According to a report, 95 percent of consumer transactions in volume terms and 65 percent in value terms are in cash. This is much higher than the 40-50 percent transaction in volumes and 10-20% in value terms for advanced economies.
Therefore, the government and the Reserve Bank of India have been working on ways to reduce cash in the economy. Considering the number of smart phones in the country is estimated to go up from 150-200 million to 500 million, mobile money transfer is expected to get a boost.
Moreover, payments can be made by only knowing the mobile or Aadhaar number.
The platform will help eliminate the requirement of receiver’s bank account, IFSC code.
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