The RBI Has Introduced A Revolutionary New System For Cashless Payments

In order to tackle the growing problems of cash, card, and cheque payments around the country, the National Payments Corporation of India (NPCI) along with the direction of Reserve Bank of India (RBI) Governor Raghuram Rajan have devised a new Unified Payments Interface (UPI).

Using this, and taking into account the meteoric rise of smartphone users and bank account holders in the country, payments will become comparatively easier from the bank to anyone else.

What is the current scenario?

The current situation of instant money transfer in the country is via NEFT or IMPS. For that, you have to take into account the sending party’s bank’s IFSC code, account number, branch details, and you’d have to add them as beneficiaries for funds transfer.

 

How will UPI come into play?

But that will be done away with using UPI. Using the app, you’d only have to enter your unique ID, the opposite party’s unique ID, and you’re good to go. You can also avail of two-step security for a more private dealing.

 

How is it different from online wallets?

Unlike most online wallets having an upper limit of Rs. 10,000, UPI will have a minimum payment threshold of Rs. 50 and a maximum of up to Rs. 1 Lakh, which is similar to most transaction facilities provided by banks.

 

What do I have to do to avail of UPI?

The process is quite simple. The customer has to download the UPI app which will soon be available on online app stores. After installing it in their smartphones, they just have to link their bank accounts, and can also link their Aadhar number optionally.

 

How will I use it while actually making the payments?

While making the payment, the customers have to select the bank account, type in the amount to be paid, enter the recipient’s unique ID, and click on send. A mobile PIN will be generated to authenticate the payment and it will be done.

 

Where can I use UPI?

With the limitations of online wallets as well as traditional money transfer out of the way, UIP will be usable for practically any purpose. So payments at online shopping sites, payments at retail shops, even payments for Cash on Delivery will become easy. All you need is yours and the recipient’s unique ID.

 

How did the idea of UPI come along?

RBI and NPCI are actively looking to minimise cash transactions to streamline payments and make use of technology. With the number of cashless transactions per person being only six in the last fiscal year, and with an estimated 500 million smartphone users in the next five years in the country, UPI seems to have arrived at the perfect time.

Digital India is not a distant dream now!

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News sources: Live Mint, iSpirt, CNBC TV18
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