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UPI the new, improved cashless transaction mode

You have money in the bank, but no cash. You have money in your wallet, but no change. In the wake of demonetization, people are trying to find ways of transacting that does not involve cash. Net banking, mobile banking, mobile wallets etc have become the new buzzwords. But there’s a new payment interface, called the Unified Payment Interface or UPI, which promises a better way of going cashless.

So, here’s what UPI exactly is

UPI (United Payments Interface) is a system that allows you to pay for products or services you buy. You can pay for your groceries or the plumber, you can pay your rent or doctor’s fees, you can buy vegetables, even a TV through a UPI-enabled app on a smartphone.

If you have used net banking to instantly send money to someone, you may have come across IMPS (Immediate Payment Service). UPI is based on IMPS, and was launched by the NPCI (National Payments Corporation of India) in September 2016.

The UPI advantage

With UPI, you can send and receive cash instantly, you can make and receive payments for products and services. It uses a safe, two-factor authentication; it’s available round the clock.

UPI is interoperable between banks. What this means is that it does not matter where you have an account, you can use any bank’s UPI-enabled app to do your transactions (20+ banks are already enabled for UPI), similar to using any bank’s ATM to withdraw money.

UPI vs other payment systems

UPI is much simpler than net or mobile banking. NEFT and RTGS, the two main ways of transferring money between bank accounts, have a slight delay in sending money and funds getting credited. With IMPS, the transfer is instant. But the more fundamental issue with these systems is that you need to add a beneficiary, which can take anywhere from 30 minutes to 8 hours depending on the bank, and you also need to have many details of the beneficiary. Through UPI, you can send money instantly – all you need is the unique payee ID of the person you are sending it to.

UPI is safer and simpler than credit or debit cards. You can pay using UPI at many places where a credit card may not be accepted – your local vegetable vendor, for example.

UPI is similar in many ways to wallets, but also different in fundamental ways. A mobile wallet is a wallet service that you load cash into from your bank account or credit card, and then use it wherever it is accepted. Mobile wallets have a limit of Rs 10,000 for non-KYC customers. UPI is an easy way to access your bank accounts through your smart phone with just an mPIN and without limits.

Until UPI gains traction…

Like all new technologies, UPI too will take time to reach mainstream adoption. The biggest problem with UPI currently is that it is not as widely accepted as cards or even wallets. Mobile wallets have invested time and money in increasing adoption and adaptability.

Upi India is a great service, and can boost our way into a cashless economy. But till acceptability picks up, adoption might not.

 Source: http://bit.ly/2h9T8OH

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Upi India

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Upi

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Upi Payment

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From punch-marked coins to UPI, a brief history of money in India

From the seals of Mohenjo-Daro and the punch-marked coins of the sixth and seventh century BCE to electronic wallets today, the world of money, currency and financial transactions have indeed come a long way.

 The launch in April of the United Payment Interface, a digital transaction mechanism developed by National Payments Corporation of India that enables users to make payments with the click of a button through their smartphones, is another chapter in the evolving story of money and payments in India. Let’s take a look at the journey so far.

 A rich history

The first coins in India are believed to date back to the seventh and sixth century BCE – though there are some theories that the seals dating back to Indus valley cities such as Mohenjo-Daro and Harappa were used as currency. This was followed by credit instruments such as loan deeds, pay orders, and hundis. Paper money, however, made its entry only in the late 18th century, according to the Reserve Bank of India’s Monetary Museum.

 Private and semi-government banks first issued currency notes, but the Paper Currency Act of 1861 gave the monopoly of this to the government of India.

 Next, cash-less methods of payment evolved, but these still required a physical manifestation of money. Cheques were introduced by the Bank of Hindustan, one of India’s first banking institutions, in 1770. The Negotiable Instruments Act of 1881 formalised non-cash modes of paper payments (such as cheques, bills of exchange and promisory notes) in India.

 The RBI was formally inaugurated as India’s apex banking institution in 1935 in Calcutta (now Kolkata) to regulate the issue of currency notes and maintain reserves to ensure economic stability. Currency notes of the day bore images of British Kings and Queens. The George VI series, for instance, went on till 1950, when the Indian government brought out the new design of currency notes, featuring symbols of the newly independent nation, such as the Ashoka Pillar. The Mahatma Gandhi series, which continues till today, was introduced in 1996.

 Since the late 1980s, changes in the Indian banking sector gathered pace. India’s first automated teller machine, or ATM, is said to have been installed by HSBC in 1987. The banking sector was opened up to private players after the reforms of 1991, when the economy was opened up, or liberalised, and with the entry of private banks, including major players such as HDFC Bank, Axis Bank and ICICI Bank. The system of money and payments began changing rapidly. Along with ATMs came plastic money in the form of credit cards and debit cards, both of which steadily gained popularity in coming years.

 The e-revolution

While internet service and mobile phones also came to India in the 1990s, internet usage and smart-phone ownership boomed only in recent years, in the 21st century. Thus, while internet banking has been around in India for quite some time (ICICI purportedly introduced it, in the late 1990s,) the advent of online/mobile payment systems such as National electronic funds transfer, or NEFT, real time gross settlement, or RTGS and interbank mobile payment system, or IMPS, is relatively new.

 Mobile or digital wallets such as PayTM and MobiKwik, which allow users to maintain a electronic wallet to which they can transfer money and transact online, are less than a decade old.

 These technological advancements have transformed our lives in many ways, allowing us to save time as well as money.

 Many of us can remember the time when we used to get a pay cheque every month, for which we would have to take time off to visit a bank, stand in line, deposit the cheque and then wait for the money to be credited to our accounts. Compare that to an instant online salary transfer by most employers.

 Similarly, we remember lining up to pay our telephone or electricity bills not too many years ago – all of which can now be done at the click of a mouse button or a tap on our smart phones.

 Cash is still king

Despite all these advances, however, cash still remains the predominant form of payment in India, even when we exclude India’s large black market (which is pegged at 20% of India’s GDP).

 According to some estimates, only 6%-7% of transactions in retail payments are conducted electronically and the rest are in cash or through cheque. Currency in circulation increased 15% in the financial year 2015-2016. In its annual report, the RBI attributed this increase to “a cluster of state elections, apart from other frictional factors such as festival-related demand and jewellers’ strike.”

 The convenience of cash is undisputed – transactions are instant, cash does not require any verification, runs 24x7 and is universally accepted. Think about the role of cash plays today: most households use cash to pay salaries of their help, to purchase vegetables and fruits and several small-ticket purchases. Similarly, cheques are still in vogue for paying rent.

 Since large sections of the country are not connected to the Internet or do not own smartphones, cash remains the primary mode of payment.

 There's an app for that

However, though cash may be king, it is also costly since it entails printing and storing currency. Moreover, cash also fuels the black-money economy, corruption and terrorism. Aware of these pitfalls of a cash-based economy, the government and the RBI are slowly changing the way payments are made in India. The government’s anti-corruption, pro-technology stance is well known and can be seen in the importance given to initiatives like JAM (the Jan Dhan, Aadhar, and Mobile), direct benefit transfers.

 The RBI’s Vision 2018 document specifically mentions a “less-cash” society. Thus, there is a concerted effort to reduce the role of cash in our lives. These efforts will pay off.

 The Upi system is another page of the book. The system, allows users to make payments directly through their smartphones, through the United Payments Interface app, without having to key in their card details or any password. With time, the RBI hopes that it is popularised to such an extent that citizens start using the app even to purchase grocery and other small transactions. Several banks have begun to launch the app and many more are likely to follow.

 While the app will take time to gain acceptance, the structural change in the way we make payments is here to stay.

 Source: http://bit.ly/2osoLIB

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Cashless Society – Digital Payments, Demonetization, etc.

Introduction

 India continues to be driven by the use of cash; less than 5% of all payments happen electronically however the finance minister, in 2016 budget speech, talked about the idea of making India a cashless society, with the aim of curbing the flow of black money.

 Even the RBI has also recently unveiled unveiled a document — “Payments and Settlement Systems in India: Vision 2018” — setting out a plan to encourage electronic payments and to enable India to move towards a cashless society or economy in the medium and long term.

 What is a cashless economy and where does India stand?

 A cashless economy is one in which all the transactions are done using cards or digital means. The circulation of physical currency is minimal.

India uses too much cash for transactions. The ratio of cash to gross domestic product is one of the highest in the world—12.42% in 2014, compared with 9.47% in China or 4% in Brazil.

Less than 5% of all payments happen electronically

The number of currency notes in circulation is also far higher than in other large economies. India had 76.47 billion currency notes in circulation in 2012-13 compared with 34.5 billion in the US.

Some studies show that cash dominates even in malls, which are visited by people who are likely to have credit cards, so it is no surprise that cash dominates in other markets as well.

Benefits of Cashless economy

 Reduced instances of tax avoidance because it is financial institutions based economy where transaction trails are left.

It will curb generation of black money

Will reduce real estate prices because of curbs on black money as most of black money is invested in Real estate prices which inflates the prices of Real estate markets

In Financial year 2015, RBI spent Rs 27 billion on just the activity of currency issuance and management. This could be avoided if we become cashless society.

It will pave way for universal availability of banking services to all as no physical infrastructure is needed other than digital.

There will be greater efficiency in welfare programmes as money is wired directly into the accounts of recipients. Thus once money is transferred directly into a beneficiary’s bank account, the entire process becomes transparent. Payments can be easily traced and collected, and corruption will automatically drop, so people will no longer have to pay to collect what is rightfully theirs.

There will be efficiency gains as transaction costs across the economy should also come down.

1 in 7 notes is supposed to be fake, which has a huge negative impact on economy, by going cashless, that can be avoided.

Hygiene – Soiled, tobacco stained notes full of germs are a norm in India. There are many such incidents in our life where we knowingly or unknowingly give and take germs in the form of rupee notes. This could be avoided if we move towards Cashless economy.

In a cashless economy there will be no problem of soiled notes or counterfeit currency

Reduced costs of operating ATMs.

Speed and satisfaction of operations for customers, no delays and queues, no interactions with bank staff required.

A Moody’s report pegged the impact of electronic transactions to 0.8% increase in GDP for emerging markets and 0.3% increase for developed markets because of increased velocity of money

An increased use of credit cards instead of cash would primarily enable a more detailed record of all the transactions which take place in the society, allowing more transparency in business operations and money transfers.

 This will eventually have the following chain effect:

 Improvement in credit access and financial inclusion, which will benefit the growth of SMEs in the medium/long run.

Reduce tax avoidance and money laundering thanks to the higher traceability of all the transactions.

The increased use of credit cards will definitely reduce the amount of cash that people will carry and as a consequence, reduce the risk and the cost associated with that.

Challenges in making India a cashless economy

 Availability of internet connection and financial literacy.

Though bank accounts have been opened through Jan Dhan Yojana, most of them are lying un operational. Unless people start operating bank accounts cashless economy is not possible.

There is also vested interest in not moving towards cashless economy.

India is dominated by small retailers. They don’t have enough resources to invest in electronic payment infrastructure.

The perception of consumers also sometimes acts a barrier. The benefit of cashless transactions is not evident to even those who have credit cards. Cash, on the other hand, is perceived to be the fastest way of transacting for 82% of credit card users. It is universally believed that having cash helps you negotiate better.

Most card and cash users fear that they will be charged more if they use cards. Further, non-users of credit cards are not aware of the benefits of credit cards.

Indian banks are making it difficult for digital wallets issued by private sector companies to be used on the respective bank websites. It could be restrictions on using bank accounts to refill digital wallets or a lack of access to payment gateways. Regulators will have to take a tough stand against such rent-seeking behaviour by the banks.

Steps taken by RBI and Government to discourage use of cash

 Licensing of Payment banks

Government is also promoting mobile wallets.Mobile wallet allows users to instantly send money, pay bills, recharge mobiles, book movie tickets, send physical and e-gifts both online and offline. Recently, the RBI had issued certain guidelines that allow the users to increase their limit to Rs 1,00,000 based on a certain KYC verification

Promotion of e-commerce by liberalizing the FDI norms for this sector.

Government has also launched Upi India which will make Electronic transaction much simpler and faster.

Government has also withdrawn surcharge, service charge on cards and digital payments

What else needs to be done?

 Open Bank accounts and ensure they are operationalized.

Abolishment of government fees on credit card transactions; reduction of interchange fee on card transactions; increase in taxes on ATM withdrawals.

Tax rebates for consumers and for merchants who adopt electronic payments.

Making Electronic payment infrastructure completely safe and secure so that incidents of Cyber crimes could be minimized and people develop faith in electronic payment system.

Create a culture of saving and faith in financial system among the rural poor.

The Reserve Bank of India too will have to come to terms with a few issues, from figuring out what digital payments across borders means for its capital controls to how the new modes of payment affect key monetary variables such as the velocity of money.

RBI will also have to shed some of its conservatism, part of which is because it has often seen itself as the protector of banking interests rather than overall financial development.

The regulators also need to keep a sharp eye on any potential restrictive practices that banks may indulge in to maintain their current dominance over the lucrative payments business.

Though it will take time for moving towards a complete cashless economy, efforts should be made to convert urban areas as cashless areas. As 70% of India’s GDP comes from urban areas if government can convert that into cashless it will be a huge gain. Therefore different trajectories need to be planned for migration to cashless for those having bank account and for those not having.

 Source: http://bit.ly/2nObN4d

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Change the way you pay with Unified Payments Interface

Reserve Bank of India Governor Raghuram Rajan launched the Unified Payments Interface (UPI) system on Monday, as its latest offering in boosting digital money transfers.

 The interface has been developed by National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments in the country. The UPI seeks to make money transfers easy, quick and hassle free.

 Ten major banks — SBI, Canara Bank, BOI, ICICI Bank, HDFC Bank, Punjab National Bank, Bank of Baroda, HSBC, and Citi Bank — are integrating the interface with their mobile apps. “29 banks had concurred to provide UPI service to their customers. We are confident that several banks will join UPI this year and the number will multiply further,” said A. P. Hota, MD & CEO, NPCI.

Traditional e-payment methods

 Most electronic payments in India is facilitated through NEFT and RTGS.

 In National Electronic Funds Transfer (NEFT), money transfers are made via electronic messages. The bank details of the sender and the beneficiary are linked using bank branch name and IFSC code. When a payment is initiated, the payer’s bank sends a ‘message’ to its NEFT service centre. All such messages are pooled every hour and the bank’s NEFT centre sends it to the RBI, which initiates the transfer. The process typically takes a little more than an hour and is available only during the bank’s working hours.

 Unlike NEFT, in Real Time Gross Settlement (RTGS), fund transfers handled on one-to-one basis. Large value transactions, typically over Rs. 2 lakhs, are carried out using this method. This is also done during working hours.

 Immediate Payment Service (IMPS) is a more recent form of fund transfer that is gaining popularity. A user is given a 7-digit Mobile Money Identifier (MMID) Code. The sender initiates payment using mobile bank by giving the MMID code and registered mobile number of the beneficiary. Most banks offer this service free-of-cost now. It is a round-the-clock immediate payment service.

 How does UPI work

 Imagine buying grocery from a supermarket by paying cash. You handover the cash, the biller hands you a receipt and the purchased good. UPI is as simple as this. Instead of handing over the cash, you tell your virtual identity to the cashier. The cashier generates an invoice through UPI, you approve it using your mobile phone and the payment is made!

The UPI is an improved version of IMPS. Apart from a bank account, all that you need is a smartphone. Once you register for UPI with your bank, a unique ‘virtual address’ will be created. This is mapped with your mobile phone.

 To initiate the payment, UPI invokes this virtual identity of the beneficiary and transfers money in real-time. It works on single-click 2-factor authentication.

 UPI will allow a customer to have multiple virtual addresses for multiple accounts in various banks. In order to ensure privacy of customer’s data, there is no account number mapper anywhere other than the customer's own bank. This allows the customer to freely share the financial address with others.

 A customer can also decide to use the mobile number or Aadhaar number as the name instead of the short name for the virtual address.

 Upi Payment can potentially eliminate the need for maintaining a mobile wallet, as this ‘virtual address’ is not limited only to individuals. This is a significant step towards moving into a cashless economy.

 Source: http://bit.ly/2iEHUBI

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UPI – ushering in the economy of the future

The demonetization of certain denominations of Indian currency has caused a major revolution in the economy, bringing in a kind of disruption that the Indian payments industry has never seen before! For a country that lived on and hoarded cash, cashless transactions and ecosystems have become the order of the day, signifying a gradual but eventual move away from the era of physical in-cash payments. In this disrupted ecosystem, traditional banking no longer occupies the position it once did by giving way to online banking as the preferred option. In this environment, a new, more secure form of payment technology has come to the fore: Unified Payment Interface (UPI).

 UPI is primarily designed and geared towards the mobile platform and allows individuals to transfer money between accounts without the need for physical input of data. India’s existing ecosystem depends heavily on three major forms of payment – credit cards, (payment) gateways and (digital) wallets. However, each of these utilities contain certain flaws that UPI can help transcend.

 Credit cards represent a physical (PoS) form of payments. Furthermore, losing this piece of plastic can have devastating consequences. UPI solves this problem by utilizing an M-PIN system as well as 2-factor authentication that do away with the need for a physical card altogether.

 Payment gateways complicate the payment process as a website that uses them must seamlessly navigate in and out of them to complete a transaction. This issue compounds its consequences with dwindling internet speeds and unreliable telecom operators. However, by integrating a simple pull-and-pull transaction support module using a virtual payment address, UPI does away with the need to select a bank or even enter account details.

 Finally, mobile wallets require money to be first transferred from the bank account to the wallet for payment to proceed. Upi India allows companies to bypass this step and directly transfer funds to the recipient.

 The RBI estimates that 18% of the country’s GDP comes from floating cash in the economy, making India one of the most currency-printed and currency-dependent countries of the world. In keeping with the economics, the eTransfer of funds has the potential to deliver savings of almost Rs 70,000 crore ($0.4 billion) in the next 5 years, if implemented correctly. According to a 2016 Moody’s Analytics study commissioned by Visa, as much as $6 billion has been added to India’s GDP since 2011 solely due to digital payments, a statistic that portends great success for the UPI ecosystem.

 In the Indian market, UPI has already generated major debates with industry leaders weighing in on the issue. They place the responsibility of enacting Upi India protocols and educating the public about these protocols on banks, also stating that there cannot be an overnight shift to the system. Critics take this debate one step further by questioning UPI’s performance in the real world and believe that there are still challenges to be solved such as the App and Bank Interface integration.

 These challenges, however, have not stopped mobile wallet companies in particular, from planning to integrate UPI services into their existing networks. As the industry begins the journey to adopt UPI as the preferred mode of financial transactions, the focus lies on providing scalable, sustainable and enriched experiences with core utility and value-add in all services. The information obtained from user analysis helps customize the experience of customers to drive ease of use and adoption. Companies must hence work towards building an all-encompassing cashless ecosystem that serves and enables even the last-mile of India in order to be prepared for the economy of the future.

 Source: http://bit.ly/2nOep5W

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UPI- Towards a Cashless Future!

What is the first thought that comes to your mind when you hear the term ‘cashless’? Probably you would refer to use of tools such as Online Banking, E-wallets, credit and debit cards etc. Well if you are not a person who spends a lot of time getting his/her attention diverted to what is happening in the finance world. So, here we are to update you with this little modification in the finance world. A system announced by the National Payments Corporation of India (NPCI) along with the joint efforts of RBI governor Dr. Raghuram G. Rajan on 11th April 2016  known as UPI (Unified Payment Interface).

 Now, it brings us to the question: What is this UPI? What is the government trying to prove with this new modification? It is a step which is towards the agenda of a ‘cashless’ future. Let us have a look at it.

Unified Payment Interface i.e. UPI is a system designed to compile all the banking transactions into a single mobile application. It runs on the platform known as Immediate Payment Service (IMPS). It gives the allowance to a customer to transfer money between two parties. Not only this but also it allows the customer to pay directly online as well as offline without the issue of typing the credit card details., IFSC codes and Net Banking/ Wallet passwords. In this article we would uncover its uniqueness, effects on economy, its components, its participants and its future estimations along with other queries.

 What are the Components of UPI?

 The UPI is a system which has got basically two main components:

 Virtual Payment Address

MPIN

Virtual Payment Address:

UPI came up with this innovative idea of ‘Virtual Payment Address’ (which will look similar to this for example if a person is an account holder in HDFC bank then his address would be displayed as ‘razorpay@hdfc’ for e.g.).You need to provide your merchant this number and they may store this against your payment details. As a result, the confidentiality is maintained.

 MPIN:

In earlier days 2FA was used by the RBI. But the way of operating the online transactions has changed. A MPIN is given to a banking customer as they register for Mobile Banking support. Chances are you have one already, but you have never used it. Cards come up with flaws such as type on phones and transmitting the data can bring up security issues. UPI removes all of these issues.

 The Participants of UPI

 Further moving to the participants of the UPI it has got the following participants:

 Payer PSP

Payee PSP

Remitter Bank

Beneficiary Bank

NPCI

Bank Account Holders

Merchants

Many of you might not know what are PSP and NPCI. Let’s have a look.

 What is PSP?

 In current times, UPI provides all banks to be registered as a Payment Service Provider (PSP). This has a clear inference that they can run their bank accounts and further include the e-wallets too.

 What is NPCI?

 NPCI is the abbreviated form of National Payment Corporations of India. They run into a lot of the payment infrastructure of India, including the issue of RuPay Cards and also making sure that you can easily withdraw money from any of the ATM’s irrespective of the bank account you hold.

 Also to remove further queries let us shower light on the part which is mostly asked consumer questions.

What is the Per Transaction Limit?

The per transaction limit in the UPI is INR 100,000.

 What kinds of transactions are included in the UPI?

Merchant payments, remittances, bills payments alongside other transactions.

 Which banks are included in the UPI?

The UPI has a tie up of 19 banks in India including Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Catholic Syrain Bank, DCB Bank, Federal Bank, ICICI Bank, TJSB Sahakari Bank, Oriental Bank of Commerce, South Indian Bank and Yes Bank.

 How does the UPI work?

 User downloads the application from the App Store, Banks Website.

User creates his/her profile by entering details like name, virtual ID (payment address), password etc.

User goes to the ‘Add/Link/Manage Bank Account’ options and links the bank account number with the virtual ID.

User selects the bank account from which the transaction needs to be initiated.

Then he clicks on the below options

Mobile Banking Registration/Generate MPIN

Change M-PIN

Mobile Banking Registration/ Generate M-PIN:

User receives a OTP from the issuer bank on his mobile number

User provides with his/her 6 digit debit card number and expiry date

Then the user provides the OTP along with his/her preferred numeric M-PIN and clicks on submit

Change M-PIN:

User submits the old M-PIN and preferred new M-Pin and clicks on submit.

He/she receives a confirmation notification of success and failure.

Effects of UPI on the Indian Economy

 Benefits for Banks:

 Single click two factor authentication

Universal app for transaction

Leveraging existing infrastructure

Safer, secured and innovative

Payment basis single/unique identifier

Enable seamless merchant transactions

Benefits for End Customers:

 Round the clock availability

Single application for accessing different bank accounts

Use of virtual ID is more secure, no credential sharing

Single click authentication

Raise complaint from mobile app directly.

Benefits for Merchants:

 Seamless fund collection from customers- simple identifiers

No risk of storing customers’ virtual address like in cards

Tap customers not having debit/credit cards

Suitable for e-commerce and m- commerce transactions

Resolves the COD collection problem

Single click 2FA facility to the customer seamless PULL

In app payments (IAP)

Apart from all of this let us look at what is the thing that is making the UPI so unique in its own way.

 USP’s of Upi

Immediate money transfer through mobile device around 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 a customer for PULL and PUSH provides incremental security with the customer not required to enter the details such as Card No, Account number, IFSC etc.

Bill sharing with friends

Best answer for COD issues, running into the ATM and getting the same amount out of the ATM

Merchant payment with single application or In-app payments

Scheduling PULL and PUSH payments for various purposes

Utility Bill Payments, over the counter payments, Barcode (scan and based) Payments

Donations, Collections, Disbursements Scalable

Raising complaint from mobile app directly

Now, we have got a deeper picture of what is UPI all about and what is the working for now let’s estimate about its success in future. On hearing about the future the first question that comes into our mind is:

 What will happen to the mobile wallets?

 For now, wallets are not included in the Upi at all which means it is just a cross bank transfer medium. Hopefully, a lot of merchants will start accepting payments through UPI instead of using the wallets we currently have. Also, the big players like PayTM won’t have any affects but the minor players in the market can face issues players like Freecharge, Mobikwick, Oxigen and Citrus Pay.

 The other effects in the future that can be estimated are as follows:

 The public sector banks are likely to face the trouble as they are not adaptive to the new technologies emerging in the market of digital payment portals.

 The study of Boston Consulting Group and Google shows that the total digital payments in India are about to rise in the near future about a factor of 10 by 2020 and also by 2023 it is estimated the digital transactions will overtake the cash transactions.

It also gives us the insight on the number of wallet users have surpassed the number of online banking users. Also it shows, the number of wallet users is three times the number of credit card users.

 Most people would be awaited to look at the opportunities presented by the bank as the small business will find it difficult to obtain a credit card but for them borrowing a loan will be made easier.

 As the transactions are digitally recorded the chances are people won’t be able to hide money resulting into the ample amount of tax collections. This will further drop down the rates of the taxes in the future.

 It will also change the mindset of the people towards the risk and investments

 According to RBI, the 18% of country’s GDP is cash flow in the economy, so for the Upi to turn into success the main focus should be the mobile penetration in the economy.

 Still it is a benchmark for the economy and many more to achieve.

 Source: http://bit.ly/2nuySKB

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India to launch Upi on Mpos through Axis Bank

Paynear, one of India’s leading digital payments platform today announced that Paynear is the only company to give an Omni-Channel cashless solutions under one umbrella.

Paynearis the first mPos solution provider company in India to launch National Payments Corporation of India’s (NPCI’s) unified payment interface (UPI) on mPos.  UPI will not only make transactions easier but also facilitate micro-payments and person-to-person payments.

Customers would be able to instantaneously transfer money across different banks using a single identifier which will work as a virtual address and remove the need to exchange sensitive information such as bank account numbers.

With this addtion, all the 15000+ merchants of paynear would be enabled with Upi India, facilitating them to accept this payment option.

In a statement, Paynear Managing Director Mr Prabhu R said, “Paynear is the first MPOS Service Provider in India to launch UPI as a payment option to all its existing and new merchants.This enables all the merchants signed with Paynear to seamlessly accept UPI Transactions thus giving convenience to their customers to pay in a secure simple manner. Given the fact that UPI is going to be the next big revolution in Indian Fintech Space, Paynear is delighted to bring UPI to all its Merchants and Paynear will take all efforts not only in enabling Upi India as an option but also in educating the merchants on how to accept Payments thru UPI which enables in higher adoption.

​"​Mr. A. P. Hota, MD & CEO, NPCI said, “We congratulate Paynear to have brought out an innovative solution facilitating last mile issues.”

About Paynear

Having established in 2013, Paynear is one of the few FinTechStartups in helping India to drive towards cashless economy. With an experience of deploying more than 10,000+ devices in 150+ cities and towns, Paynear is equipped to meet the emerging needs of card & digital payments landscape with its fully compliant and cutting-edge payment solutions.

Paynear believes that accepting card payments should not be complicated requiring high-cost infrastructure. The Company provides a simple and affordable solution for businesses of all sizes - from an Individual to Multi-million dollar enterprise to accept hassle free card payments.

Source: http://bit.ly/2nPd7I8

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Upi

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Upi

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Good Move By Govt To Promote Digital Payments,Slashes Prices.

In order to further promote digital and card payments, Department of Financial Services, Ministry of Finance issues direction in public interest all Public Sector Banks(PSBs) not to charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (Upi India) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1000/-, with service tax being charged at actual;

 For Unstructured Supplementary Service Data (USSD) transactions above Rs. 1000/-, a further discount of Fifty (50) Paise on these rates shall apply.

 In line with the Central Government’s objective of promotion of payments through cards and digital means over payments in cash, the Reserve Bank of India (RBI) has recently rationalized customer charges for transactions up to Rs. 1000/- settled on Immediate Payment Service (IMPS), Unified Payments Interface (Upi India) and Unstructured Supplementary Service Data (USSD) with effect from 01.01.2017 till 31.03.2017. RBI has also rationalized the Merchant Discount Rate (MDR) for debit card transactions up to Rs. 2000/- with effect from 01.01.2017 till 31.03.2017.

 In order to further promote digital and card payments, the Department of Financial Services (DFS), Ministry of Finance has issued a direction in public interest to all Public Sector Banks(PSBs), in accordance with which these banks shall not charge fees for transactions settled on Immediate Payment Service (IMPS) and Unified Payments Interface (UPI) in excess of rates charged for National Electronic Funds Transfer (NEFT) for transactions above Rs. 1000/-, with service tax being charged at actuals. For Unstructured Supplementary Service Data (USSD) transactions above Rs. 1000/-, a further discount of fifty paise on these rates shall apply.

 Source: http://ow.ly/m3mN309Vgb1

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Upi

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How UPI Can Make India A Cashless Economy?

The Government has scrapped 500 and 1000 rupee notes, to curb black money in the economy. Black money fuels corruption and terrorism in India. However the scrapping of 500 and 1000 rupee notes, creates the need for an alternative to cash. This gives an opportunity for India to become a cashless economy. A lot of citizens believe, mobile wallet is the solution to make India cashless. The mobile wallet can help India become a cashless economy. Do you want to send your friend money, using just your phone number? The mobile wallet can help you do so. Want to receive money from a friend? The mobile wallet can help you do that too. You can even transact online using your phone number, without the need for a credit or a debit card.

But there’s a small problem….Let’s say you have a bank account. Mobile wallets take you and other users with bank accounts, outside the banking system. The mobile wallets allow you to transfer money, within the wallets of the same provider. You use a mobile wallet of ABC Provider. You can send/receive money from your friends or family, only if they have a mobile wallet of the same provider (ABC Provider). To encash money stored in a mobile wallet is quite difficult. You have to transfer money into a bank account.

Can UPI Make India a Cashless Economy?

Unified payment Interface also known as UPI, helps you send and receive money, using your smart phone. UPI is a bank account to bank account, money transfer system. You can transfer money in an instant.

How does the UPI work?

All you need is a bank account, an android Smartphone and a registered mobile number, which is linked to your bank account. Download UPI App from any of the participating banks (there are 21 banks), from Google play store.

You register for UPI and create a virtual payment address (VPA). Your VPA looks like this, name@bankname.com

·         Name = your name

·         Bank name = name of the bank

You can send/receive money from your friends/family, if they use the UPI. Just use your virtual payment address, to transfer money to family and friends.

How to receive money using UPI?

·         Just Login to UPI based app

·         Click on UPI app and choose Collect via UPI

·         You then enter the virtual payment address (VPA), of the person, from whom you want to receive money.

·         You enter the amount and any remarks if needed.

·         If you have multiple bank accounts/ virtual payment addresses, you choose the virtual payment address, where you want to receive money.

·         You then submit the details and wait for approval.

What are the benefits of the UPI app ?

o    Send/receive money from friends and relatives.

o    Buy railway and movie tickets.

o    Pay utility bills.

o    Pay insurance premium.

o    Donate money to a good cause or pay your child’s school fees.

o    Direct payment at online shopping websites.

UPI is the answer to make India cashless. UPI app has the power to penetrate far more homes, than all the mobile wallets put together. Using UPI you can link two or three bank accounts and send/receive money, just by sending a message on this app. You can send money up to INR 1 Lakh, to your friends or relatives, using your mobile, without entering debit/credit card details, net banking, wallet password or even the receiver’s bank account. Yes…You can send money using UPI, without knowing the receiver’s bank account number or even IFSC code. It’s just like magic. Be Wise, Get Rich.

 http://wattrup.blogspot.in/2016/12/upi-can-make-india-cashless-economy.html

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Decoding Unified Payments Interface system A step towards cutting cash in the economy

So, what is the Unique Payments Interface or Upi India?

UPI is an online payments solution which will facilitate the transfer of funds instantly between person and person (or peer to peer) using a smartphone. UPI can be used both to send and receive funds. The system was launched this April by the then RBI Governor Raghuram Rajan, and it is now operational. The National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments systems in India, which was set up with the guidance and support of the RBI and Indian Banks’ Association (IBA), is pushing the solution.

And how does UPI work? How is it different from other modes of electronic payment?

Popular online payment services currently, the National Electronic Funds Transfer (NEFT), Immediate Payment Service (IMPS), or Real-time Gross Settlement (RTGS) require a user or customer to register on the bank’s web site, add a beneficiary, and share details of bank accounts. In UPI, a user just needs to download the Upi India app — offered by several banks — from the Google Play Store on an android phone, register details, and create a virtual address. This can be your mobile number or any unique mail address. After that, you can send or receive funds up to Rs 1 lakh to or from another person or establishment after a request from a person on the other leg of the transaction who too has a unique virtual address or ID. This is done instantly, with the bank authenticating it.

This is how it works: For instance, your local shopkeeper can send a request to pull funds for the purchases you have made after sending a request on your unique virtual address. You can confirm the payment by saying OK and the payment will be carried out instantly after being validated at the back end by the bank. And you can receive cash through this system in the same way.

The difference between UPI and payment modes such as NEFT and IMPS is that bank account details are not shared in the transaction, and transactions can be made 24×7 all year round. NEFT transactions do not happen on holidays and during non-banking hours, there are limitations in funds transfer; in IMPS, account details and details like the 11-digit Indian Financial System (IFS) Code, which indicates a bank’s branch code, have to be entered.

The other advantage is that it is possible to have multiple unique virtual addresses and use multiple bank accounts, and without necessarily having to go through your own bank for a variety of transactions. For the shopkeeper or other large establishments, it also means not having to run the transaction through an electronic machine such as a card reader.

Who offers this payments solution now?

For now, only banks — 29 of whom have signed up. Biggies such as State Bank of India and HDFC Bank are yet to come on board, but are expected to join soon. Restricting the service to just banks could be because in the initial stages, the central bank and NPCI would want to observe how the system works, and to gain a measure of comfort before opening it up to other players too. Some see this as a move to protect banks — which have been impacted by mobile wallets and other payment modes, and which are faced with the imminent entry of more payment banks licensed by the RBI. Besides, the NPCI has been promoted by banks, who may have an interest in keeping other players out for now.

How cost effective is this solution in comparison to other payment solutions?

Banks are allowed to charge for each transaction, but they haven’t started doing so yet. These are initial days and the 29 banks that have signed up are likely to take a while to get into the groove. The volume of transactions too is bound to take time to develop, as the popularity and sales of smartphones increase.

So what is the broader objective of launching Upi India?

The UPI fits in well with the move to migrate towards a cashless economy in the medium and long term. By bringing person to person payments for even very small amounts online, it would be possible to reduce the amount of cash in the system, create a trail of all transactions, lower tax evasion and boost revenues. As Finance Minister Arun Jaitley said last week, tax rates, including on the GST, could be lower if tax evasion was lower. Bankers say that mapping this financial behaviour could also help them analyse and firm up approvals for credit to customers. And with the growing use of smartphones in India and the number of mobile phone subscribers — a billion — a large number of transactions are expected to be carried out through phones or electronically. This is already reflected in the rising number of transactions through the electronic mode rather than by cheques.

 Source: http://bit.ly/2kzb8Gc

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UPI a big leap in digital empowerment

The inauguration on Thursday of the National Payments Corporation of India (NPCI)-initiated Unified Payment Interface (UPI) is a big step forward in financial inclusion and the use of technology to improve quality of life. The post office can soon shut down its creaky, expensive money order service, which costs the sender 5% of the amount transferred, once the number of participating banks goes up from the present 21 to include all banks.

Upi Payment enables people to transfer money from their accounts instantly and at any time to another bank account linked to a smartphone. It will bring down the use of cash, simplify merchant payments, lower costs and improve security and transparency. UPI’s open architecture and fully flexible user interface are welcome. The technology requires just a virtual handle for instant peer-to-peer payments and, hence, enables anyone with a bank account and a phone to transfer money to another bank account without having to know or enter that person’s bank account number or IFSC code. Several bank accounts can also be linked to the same virtual address. It allows merchandise to be paid for directly from the customer’s account to the merchant’s, without cash and without even a payment card.

Transaction charges also hold the key for its wider adoption. At present, the upper limit per UPI transaction is Rs 1 lakh, whereas prepaid wallets cannot do more than Rs 10,000 worth of transactions without know-your-customer (KYC) norms in a given month. While there is reportedly no cap on how much the sender bank can charge for a single transaction, it is mandated to pay 50 paise for every transaction to the NPCI and a minimum of Rs 1 to a maximum of Rs 5 to the bank of the receiver. Rationalisation of transaction charges that include interchange fees will be useful to popularise UPI as a fund transfer and payment option.

Will India’s rural masses be able to use Upi Payment? They will need a smartphone and data connectivity. The price of either depends on policy, skewed towards expensive, as of now. The young, the majority, will manage fine. The rest will have to muddle through with cash.

Source: http://ow.ly/BSxW309Cy2S