Unified Payment Interface

 What is unified Payment Interface (UPI)?

1. Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. 

2. UPI is a payment system that allows money transfer between any two bank accounts by using a smart phone.

3. UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC code, or net banking/wallet passwords.

3. The interface has been developed by National Payments Corporation of India (NPCI). 

4. It aims to simplify and provide a single interface across all NPCI systems besides creating interoperability and superior customer experience.

5. The UPI seeks to make money transfers easy, quick and hassle free.


What is NPCI?

National Payments Corporation of India (NPCI) is an umbrella organization for all retail payments system in India. It was set up with the guidance and support of the Reserve Bank of India (RBI) and Indian Banks’ Association (IBA). 


Value Proposition of UPI:

1. Simple Authentication Process: allows banking customers with registered mobile to easily set and change MPINs.  

2. Simplified Issuance Infrastructure: Usage of virtual addresses and payment addresses in conjunction with mobile helps banks to create tokenless infrastructure, thereby reducing the costs.

3. Simplified Acquiring Infrastructure: Considering the fact that India has nearly a billion phones and 150 million smartphones (expected to be at 500 million in next 4–5 years), massive scale can be achieved if effective use of mobile is made compared to creating costly physical acquiring infrastructure.

4. Flexibility for users: Customers get the flexibility to make payments securely and in addition, innovations such as reminders, using multiple accounts, using special purpose virtual addresses, etc. allow users to enjoy a superior experience.

5. Creating National Interoperability: A unified interoperable interface allows all players to innovate and provide superior customer experience and still provide a secure, standard-based, interoperable payment scheme.

Advantages :--




The proliferation of smart phones, the availability of an online verifiable identity, universal access to banking and the introduction of biometric sensors in phones will proactively encourage electronic payment systems for ushering in a less-cash society in India.