- Unified Payments Interface (UPI) is India’s mobile based, ‘fast payment’ system that facilitates customers to make round the clock payments instantly using a Virtual Payment Address created by the customer.
- This eliminates the risk of sharing bank account details by the remitter.
- UPI supports both Person to Person and Person to Merchant payments as also it enables a user to send or receive money.
- It was developed by the National Payments Corporation of India (NPCI), an RBI regulated entity.
How is it unique?
- Immediate money transfer through mobile device round the clock 24*7 and 365 days.
- Single mobile application for accessing different bank accounts.
- Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment.
- Virtual address of the customer for Pull & Push provides for incremental security with the customer not required to enter the details such as Card no, Account number; IFSC etc.
Why in News?
- The RBI and the Monetary Authority of Singapore have announced a project to link their respective fast payment systems, Unified Payments Interface and PayNow. The linkage is targeted for operationalisation by July 2022.
- PayNow is the fast payment system of Singapore which enables peer-to-peer funds transfer service, available to retail customers through participating banks and Non-Bank Financial Institutions in Singapore.
- The UPI-PayNow linkage will enable users of each of the two fast payment systems to make instant, low-cost fund transfers on a reciprocal basis without a need to get onboarded onto the other payment system.
- The UPI-PayNow linkage is a significant milestone in the development of infrastructure for cross-border payments between India and Singapore, and closely aligns with the G20’s financial inclusion priorities of driving faster, cheaper and more transparent cross-border payments.
- NPCI was incorporated in 2008 as an umbrella organization for operating retail payments and settlement systems in India.
- It is an initiative of the RBI and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007, for creating a robust Payment & Settlement Infrastructure in India.
- It has been incorporated as a “Not for Profit” Company under the Companies Act 2013.
- It has changed the way payments are made in India through a bouquet of retail payment products such as RuPay card, Immediate Payment Service (IMPS), Unified Payments Interface (UPI), Bharat Interface for Money (BHIM), BHIM Aadhaar, National Electronic Toll Collection (NETC Fastag) and Bharat BillPay.