Reserve Bank of India governor Raghuram Rajan today launched the Unified payment Interface at a function in Mumbai. UPI its acronym, is billed as a giant wave in digital payments and a platform that can potentially take the wind out of cash usage habits of Indians.
The frugal technology around which it is built consists of Bank accounts, Aadhaar and Mobile. While the penetration of these in the population is around 56%, 93% and around 15%(smart phones), Theoretically, Nothing stops these numbers from reaching 100% saturation. That is why Mr. Rajan in his keynote speech emphasized the banks thinking on re-launching this service even on feature phones/basic handsets.
The technology behind this was developed indigenously by Kolkata based R.S Software which was selected by NPCI after technical evaluation.
Mr. Rajan warned that the UPI will need to deal with issues involving
customer grievances, security breaches and fraudulent transactions. It would be easier for fraudsters to scam the system and steal money. UIDAI today came out with instructions to people not to share copies of their aadhaar cards with unauthorized people. The UPI is launched today in Phase-I where the users will be a closed group of around 30 banks.
It is expected to be thrown open to the public, in another two months when more banks might offer the service. It was reported that wallets too want to be part of the bandwagon and, as the RBI governor mentioned, it was open to all possibilities. It has become more than clear that if the platform gains wide acceptance, it would be very difficult for any payment platform such as apple pay, samsung pay or android pay, to gain foothold in the Indian market.
Public sector banks considered more traditional and slow adopters of technology have demonstrated that innovation can happen in government sector too. It is hoped that wallets which were presently left out of the UPI would be included pretty soon. Banks may be hesitant to allow other bank apps to link with their bank customers and this feature too might be resisted.
Public sector banks considered more traditional and slow adopters of technology have demonstrated that innovation can happen in government sector too. It is hoped that wallets which were presently left out of the UPI would be included pretty soon. Banks may be hesitant to allow other bank apps to link with their bank customers and this feature too might be resisted.
There are reports from other countries too about such services being either launched or developed. In 2015 in US, clearXchange announced the availability of a real-time payments solution. It was reported recently that banks have a short window of about six months to capture the P2P money transfer market before the likes of apple pay take over.
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