The National Payments Corporation of India (NPCI), an umbrella organization of the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA), has launched a Unified Payments Interface (UPI) that industry experts say will change the way people make money transfers.
And you should thank the visionary RBI Governor Raghuram Rajan for this. Rajan told reporters that this service is the revolution people have been demanding in the banking sector in India.
“What we have in India is the most sophisticated public payments infrastructure in the world,” said Rajan.
So what is the UPI all about?
The most important feature of this app is that it can function as a single platform for all your bank accounts.
Technically, this means that you do not need to clutter your smartphone with the app of every bank you have an account with. Just one UPI app is enough.
Each customer using this app is identified with a unique virtual address.
There is no need of sharing details like name, bank account number, etc., for receiving money, making the user’s account secure.
When transferring money, a user only have to know the unique virtual address of the receiver. At the press of a button on the app, money gets transferred, like a simple text message.
Similarly, online payments too can be made using the single unique virtual address, eliminating the need of filing a series of details and waiting for an OTP.
All transactions are verified through the phone itself. Merely knowing someone’s virtual address does not compromise the holder’s account.
Even merchants, like online e-commerce businesses, can request for this mode of payment, and you can avail of it without fear since you do not need to enter your bank account details.
The cost of each transaction will be less than Rs.0.45. One can transfer upto Rs.1 lakh using the UPI.
According to NPCI, 29 banks have joined this platform. The launch of the app pushed up the stocks of the RBI on Tuesday.