New Delhi: As an organization, the National Payments Corporation of India (NPCI) is changing the way payments are made in the country—from launching a card payment settlement system that competes with Visa and MasterCard to setting up a platform to facilitate instant money transfer.
The Reserve Bank of India-backed organization is preparing to launch the second version of the Unified Payments Interface (UPI) called UPI 2.0 by early next year and is betting that the upgraded version will accelerate India’s movement towards a cashless economy. In an email interview, NPCI managing director and chief executive A.P. Hota spoke about the progress made and challenges encountered by UPI so far, and the latest milestones that have been set for the payment system. Edited excerpts:
Since its launch, how many banks have taken to UPI technology?
Twenty banks have launched UPI. Mobile apps of 17 banks are available on the Google play store.
In the last one month, what are the challenges that have emerged with respect to UPI?
The main challenge is awareness. Though media has played a splendid role, for making the customer to actually download the app and make use of the same, it’s required that the value proposition of the technology needs to be clearly explained.
But we know that unlike social media apps, adoption of electronic payments would be slow.
How much time does it take for any financial product to integrate UPI?
It takes time. The simplest form of mobile payment is person-to-person payments. Merchant payment is complex and requires integration with banks as well as merchants’ payment system. Card payment is simple because the process is the same all over the world. Mobile payment processes are relatively new.
Currently, how many UPI transactions have started to take place?
On a daily basis, about 4,000 transactions are taking place from about 300,000 customers who have downloaded a UPI-based bank app.
So, apart from the banks, how many other entities such as a payment gateway, have adopted UPI?
Not many have, but we expect about 50 such merchants by the end of October integrated with UPI.
In the next one year, what are the targets for UPI—in terms of bank adoption, consumer traction and usage of UPI by other payment products?
We expect 50 banks, 15 million customers, 100 merchants and around one million transactions as a peak day volume by March 2017.
What is the strategy being used to counter the awareness challenge you earlier mentioned and to reach the targets mentioned above?
Once we reach about 30 banks including State Bank of India and HDFC Bank, we will start an awareness campaign. We will also add new use cases of UPI technology such as merchant payments and bill payments. We have also planned a UPI version 2.0 for March 2017.
What are some of the features that UPI 2.0 will have?
UPI 2.0 will have enhanced features based on the feedback received from banks. For instance, specialized payments such as bill payments, insurance premium, EMI (equated monthly instalment) collection, etc. would be made very simple by seamless integration with BBPS (Bharat Bill Payments System).