After the Unified Payment Interface (UPI) first went live on 26 August this year, 19 banks rolled out their UPI-enabled apps in the first phase. More followed later. On 28 November, 30 banks were live with their UPI apps. This month banks like State Bank of India, HDFC Bank Ltd, HSBC and Standard Chartered Bank went live with UPI . In the first phase, banks such as Axis Bank Ltd, Union Bank of India and Federal Bank Ltd had rolled out their apps.
National Payments Corporation of India (NPCI), which is responsible for the UPI system, believes that with bigger banks joining in, the transaction volume is set to rise.
“Now that State Bank of India and HDFC Bank are participants in UPI, we expect the volume to grow dramatically in the next 2-3 weeks. The total number of UPI banks now is 30,” said A.P. Hota, managing director and chief executive officer, NPCI.
What’s on offer
To use the UPI, you need to have a bank account, a registered mobile number, an Android smartphone to download the app and your bank needs to be a member of UPI.
Some banks have enabled UPI on their existing apps, while some have launched new apps for their retail consumers.
For instance, State Bank of India has launched a new app—SBI Pay—for UPI transactions, whereas HDFC Bank has enabled UPI on its existing mobile banking app.
A few banks such as Standard Chartered Bank and HSBC have also launched UPI solutions for companies.
“To scale up UPI, you need to enable transactions for commerce too. Right now, we have four corporate clients on board. We all need to build an ecosystem that accepts UPI payments for it to succeed,” said Divyesh Dalal, country head, global liquidity and cash management, HSBC.
How to use it
To transact through UPI, you need to download a UPI-enabled banking app and then choose the UPI option.
The process of doing this varies from app to app. The UPI icon would usually be on the home screen of your bank app. You have to first register yourself by entering your details such as name and bank name, then create a virtual ID on the app. Once you enter all the details, the app will populate your bank account number and Indian Financial System Code (IFSC). If you have multiple bank accounts, you can select the one you want to link with UPI. You also have to provide your debit card details such as the last digits of your debit card and expiry date. As of now, Maestro debit cardholders can’t transact on UPI.
“Maestro debit cards don’t have an expiry date, which is a prerequisite for on-boarding on UPI. We will either try to work out a way to enable Maestro cards or replace the card with a chip and PIN card,” said Manju Agarwal, deputy managing director, corporate strategy and new business, SBI.
Once you enter your debit card details, next you have to create a mobile PIN (mPIN). Once you create your mPIN, you can start sending and receiving money via UPI.
Post-demonetisation—where the government scrapped the Rs500 and Rs1,000 notes—banks have been increasingly focusing on cashless payments.
UPI being one of the cashless modes of payment, banks have put in more efforts to spread awareness about the product. There has been an increase in the number of downloads and transaction volumes.
“There has been an uptick in downloads and transactions on UPI. The average ticket size of a transaction on UPI platform is close to Rs2,000. We are also seeing interest from large merchants,” said Sangram Singh, head, cards and payments business, Axis Bank. Right now there is no charge on transactions through UPI.