The cheque will soon no longer be in the mail. The unified payment interface (UPI) is set to go live in two to three days with 21 participating banks, the National Payments Corporation of India (NPCI) said in a statement on Thursday. As of Thursday, 19 banks were already prepared with their respective UPI applications, while two others will be ready in the next couple of days.
UPI is a common platform through which a person can transfer money from his or her bank account to any other bank account in the country instantly using his/her UPI ID. UPI will be based on the Immediate Payment Service (IMPS) platform and can be availed by customers of banks agreeing to provide the service.
Some major banks like State Bank of India (SBI), HDFC Bank and Bank of Baroda will mostly go live in the second phase of the launch, which is slated for September 30. According to Shiv Kumar Bhasin, chief technology officer at SBI, the country’s largest lender is “close to finishing” the development of its UPI application and has not faced any kind of glitch whatsoever with the platform so far.
“There is no doubt that UPI is a great initiative. Only time will tell how it will be received by the public but it will certainly make it easier for customers to transfer funds, especially so after most banks have finished integrating with the platform,” Bhasin said.
NPCI managing director and chief executive officer AP Hota said the platform is ready for customer use and is currently working without any issue. In case of a transaction failing, customers will be able to raise a complaint from within the application itself, thanks to an in-app provision that every UPI app is mandated to have.
“The primary responsibility to receive a complaint and put it in motion lies with the bank whose app is being used to initiate the transaction. That bank will then take it up with the respective concerned party,” Hota told FE in an interaction after the announcement.
The transaction fees levied on a transaction made through UPI will be similar to the fees currently being paid for IMPS transactions. While there is no cap on how much the sender’s bank can charge for a single transaction, it is mandated to pay 50 paise for every transaction to NPCI and a minimum of `1 to a maximum of `5 to the bank of the receiver.
Many experts have said that the UPI will change the face of payments in India, primarily because it will offer customers a way of transacting very easily using their bank accounts. With the advent of this platform, IMPS transactions are expected to shoot up and will likely result in IMPS becoming the most preferred mode of funds transfer, especially from individual to individual.
“Simply put, UPI is IMPS taken to the next level… I think it will play a huge role in inclusion,” said Vivek Belgavi, leader, fintech, at PwC India.
“UPI, the brainchild of RBI (Reserve Bank of India), has seen its light today. Keeping the tradition of forefronting the technological developments, Union Bank in association with NPCI is one of the first public sector banks to launch this product. This mobile app can be used by both our bank’s customers and non-customers,” Union Bank Bank of India chairman and managing director Arun Tiwari said in a statement.
Speaking about the impact of UPI on e-wallet companies and payment companies, Belgavi said they would continue to co-exist because the success of a wallet company or a payment company is not the wallet itself but the problem it is trying to solve.
“If a wallet company has solved a particular problem like paying online on a website or has done a lot to improve user interface in that regard, then it won’t lose that value after UPI hits the ground,” Belgavi said.
The banks that are going live with UPI in the first phase of the launch are Axis Bank, ICICI Bank, Punjab National Bank, YES Bank, Federal Bank, Union Bank of India, UCO Bank, United Bank of India, Vijaya Bank, Andhra Bank, Bank of Maharashtra, Canara Bank, Bharatiya Mahila Bank, DCB Bank, Oriental Bank of Commerce, South Indian Bank, Karnataka Bank, Catholic Syrian Bank and TJSB Sahakari Bank. In addition, IDBI Bank and RBL Bank will act as “issuers”, which would give their customers the option to download any of the above-mentioned UPI-enabled apps and link it to their bank account.