 "State Bank of India")
With State Bank of India (SBI), the country’s largest lender, and HDFC Bank, the second-largest private sector lender, deciding to accept payments made through the Unified Payments Interface (UPI), the digital payment system is likely to see robust growth in the days to come. With this, the number of banks accepting UPI payments stands at 28.
Launched on August 25 this year, UPI has made money transfer simpler by doing away with details such as bank account number, IFSC code, etc. Bankers had hailed it as the ‘WhatsApp moment’ for payments in India. One can send money by sending a text message. However, transactions through UPI were not picking up as the daily transactions through the platform stood at a moderate figure of 10,000.
This could change dramatically with SBI and HDFC Bank coming on board, says A P Hota, managing director and chief executive officer of National Payments Corporation of India (NPCI), which runs UPI. “SBI commands the largest market share; we were waiting for them to come on board. Now that they’re set to go live, we’ll start advertising and also ask banks to increase communication to their customers to use UPI.”
By March next year, NPCI aims to take up the number of daily transactions to one million. It also expects the number of registered users to go up from two million now to three million within a month.
UPI went live on August 25. By using this application, a customer can transfer money to another person via a unique virtual address (virtual addresses are aliases to a bank account, allowing a customer’s account to be uniquely mapped), or mobile number, or Aadhaar number. And, therefore, customers do not need to know the payee’s IFSC code, bank account details, etc, thus, making the process simpler.
UPI is built on the existing Immediate Payment Service, or IMPS, which allows real-time transfer of money 24x7, and is also interoperable across banks.
Another distinguishing feature of UPI is that it allows one to send a request asking for payments. As a result, e-commerce and merchants are expected to drive growth as it would allow them to send invoice requests and make payments and settlements much faster. However, merchants haven’t yet become a part of UPI in a significant way. But now, in what is being termed UPI 2.0, merchants are supposed to come on board.
Apart from SBI and HDFC Bank, the others accepting payments through UPI include Axis Bank, ICICI Bank, Union Bank, YES Bank, IDBI Bank, HSBC, etc. Earlier, the launch for the UPI was slated to be July 31, which had to be postponed by a month, as some banks were not ready.
