New Delhi: Airtel Payments Bank Ltd, the first payments bank to start operations, is taking the lead in launching a UPI (Unified Payments Interface)-based payment service for all its customers, starting Wednesday.

The important thing in the revenue model is the volume in customers and volume in transactions. Through UPI, we can enable a wide range of transactions, Shashi Arora, managing director and chief executive of Airtel Payments Bank said in an interview.

UPI is a payments system launched by National Payments Corp. of India (NPCI) which facilitates instant fund transfer between two bank accounts on the mobile platform without having any details of the beneficiary’s bank.

“We have been in talks with NPCI for about a month now and we have been working robustly on the integration part, including the testing with about 1,500 UPI handles across India for about 10 days through our employees. We tested all kinds of transactions and saw a lot of good traction coming through that which gives us the strong belief that this is absolutely the right road to go," he said.

“You’ll be able to create handles for example, xyz@airtel and can link your account to the app. This can be done through the Bharat Interface for Money (BHIM) app or the Airtel app," added Arora.

Customers will be able to send and receive money through this UPI handle. Merchants will also be able to accept payments over UPI through the new IDs or quick response (QR) codes.

“There are around 15 million mom-and-pop stores out of which 2.5 million are directly associated to us but the remaining 12-13 million still use cash predominantly. The 2.5 million stores were already using a closed-loop QR code by Airtel Payments Bank but with UPI, even if the merchant is not linked to our bank but has UPI QR code can accept payments from any customers," said Arora.

“Currently, we are not charging anything for UPI transfers. But, Person-to-merchant (P2M) transfers at some stage will have to be chargeable because that is a revenue generation mechanism for us. As a payments bank, these kinds of payments form our economic model. Person-to-person (P2P) can still be free but in P2M, there is payment involved where someone is paying and the other person is earning and we would want to put a fee to it."

The payments bank, rolled out on 12 January with an investment of Rs3,000 crore, competes with Paytm Payments Bank Ltd, India Post Payments Bank Ltd and Fino Payments Bank.

In June, Paytm Payments Bank had made an announcement of going live on UPI by August The Economic Times reported.

Transactions using UPI rose to a record 11.4 million in July, a five-fold increase since December, according to a statement from NPCI. UPI was launched in August 2016 with 21 banks, and is currently being offered by about 53 banks.

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