UPI means United Payments Interface – a system that integrates various bank accounts into one mobile application. Over the next few years, it is expected that UPI India will continue to play a significant role in the digital payments space.
India has created a vast, safe, effective, and scalable public digital infrastructure, laying the groundwork for a powerful, globally significant ‘Digital Payments Revolution.’
The industry will be strengthened by tokenising cards, offline payments, e-RUPI, digital money, and employing UPI for toll tax collection and cross-border transfers. Even though emerging technologies like BNPL and digital currency are anticipated to shape the future of payments, UPI, as a retail online transaction platform, is predicted to continue to rule the nation’s digital payments markets.
Let’s now shine the light on what UPI’s future looks like, one feature at a time.
Payer-initiated and P2P-focused transactions have made up the majority of UPI transactions. UPI 2.0 tries to ease worries by giving the underlying transactions additional context.
In UPI 2.0, you can send a digital invoice and a collection request to your customers, helping them understand the request’s purpose and increasing side transactions related to the collect submissions.
Another exciting aspect is rapid response (QR) codes, which are used as a payment method to encourage digital payments in small businesses. In a few international areas where the code is extensively used, there have been cases of fraud involving QR transactions.
The intent/signed QR feature aims to verify the payee’s identity more effectively while resolving these issues and fostering offline merchant payments.
Salient features of UPI 2.0
- Linkage of overdraft account
- One-time mandate
- Invoice in inbox
- Signed intent and QR
Unique Credit Facilities
Financial organisations may benefit significantly from using UPI 2.0, especially when collecting small-ticket loans. To create collect requests, banks might use a cyclical approach. Along with such collect requests, the monthly EMI statement may be automatically prepared and delivered to the consumer. The consumer can review the request’s information and provide approval for immediate EMI payback. Although UPI 2.0 offers numerous improvements that will improve transaction security and make consumer payments more convenient, adding certain additional features may promote acceptance.
UPI Credit Card Linkage
According to the Reserve Bank of India, the UPI card may soon be connected to UPI, enhancing its scope. With credit card UPI, payments will become more accessible through QR codes without needing a Point of Sale (PoS) machine.
The usage of digital payment systems is expanding rapidly in India, and consumers’ increasing reliance on these systems necessitates the creation of an appropriate regulatory framework. Although the PSS Act’s scope allowed for the creation of the UPI Procedural Guidelines, which were intended to regulate the UPI payment system in India, there is still a need to implement a robust regulatory framework that would include transaction flows as well as procedural matters.
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The UPI payment mode has proved its mettle and outshone every other payment mode introduced in the country to date. Following are a few reasons behind its growth:
A significant contributor to India’s GDP
Widespread customer adoption
As we move further into the 21st century, UPI transaction means more customer choices. It will be characterised by the following:
Low Or No transaction cost.
Embracing zero transactional charges
Safer and secure before