National Payment Corporation is soon to launch a new version of Unified Payments Interface (UPI) named UPI 2.0, according to media reports.
The fast and simple mobile number-centric payment method has been witnessing unprecedented penetration since its inception 20 months ago. With 91 crore transactions, UPI has till now processed over Rs 1 lakh crore.
However, about 90 percent of UPI-powered transactions is peer to peer with a little usage for merchant payments. But, that is going to change with the launch of UPI 2.0. It promises to ease payment between individuals and businesses.
UPI 2.0 would empower people to set up a mandate for recurring payments such as monthly utility bills, insurance premiums, mutual funds and monthly rents amongst several others. Importantly, linking one’s UPI account for paying EMIs or premium would be a one-time affair.
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Such payments would be debited from an individual account on agreed terms and conditions. This reduces the headache of making payments manually every month for premium and EMIs.
The newer version of UPI will also facilitate international inward settlement. It will fasten and simplify the process of sending money from foreign soil. UPI 2.0 would leverage VPA that essentially allows users to transfer money without entering the account number and IFSC code, amongst others.
For merchants, setting up a UPI-based payment is economical and faster than the point of sales (PoS) terminal.
With the launch of Google Tez and Paytm, UPI ecosystem has experienced huge growth in 2017. Currently, WhatsApp UPI is in closed beta stage and is due to be used by many once the feature gets open to the public.
So far, the UPI is largely used for peer to peer fund transfer. However, the government has been making efforts to drive its adoption through a slew of initiatives.
It recently asked UPI-based apps to integrate Bharat QR code on their platform. Besides, the government also plans setting up QR Code based payment options across all departments
Of late, UPI has been reducing the business of companies including Paytm, MobiKwik, and FreeCharge.
With UPI 2.0, NPCI intends to take digital wallet further. At present, Paytm has a perfect use case with Uber. However, the ride-hailing giant is also expected to launch its own UPI-based payment feature that would eventually add more woes to Paytm wallet business.
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