The process of scanning a QR code and approving a request for payment through UPI from one's banking app just makes it as simple to pay merchants as for P2P payments
Technologies to make digital payments seamless have been exponentially increasing in the past few years. One technology that stands out is National Payment Corporation of India's flagship product, UPI (Unified Payments Interface).
UPI clocked 246 million transactions in June 2018 compared to 2 million transactions in December 2016. This has happened because of two reasons: the ease of use of UPI and the growing appetite of consumers for digital P2P (peer to peer) payments.
Recently NPCI introduced the UPI 2.0, which improves the payment experience for consumers and merchants. These improvements are:
Simple merchant payments – Along with enabling P2P payments, UPI 2.0 also enables P2B (person to business) payments (or merchant payments), by helping users make payments for purchases and for utility bills. The process of scanning a QR code and approving a request for payment through UPI from one's banking app just makes it as simple to pay merchants as for P2P payments.
Easier access to credit – UPI 2.0 allows users to link their overdraft account and avail the same credit facilities and benefits associated with their overdraft account. This aims at enhancing small ticket, limited period, scenario based digital lending to more consumers.
Additional trust and security – Consumers can make use of the signed QR/intent feature that identifies authorised payment recipients. UPI 2.0 has also introduced a feature of 'Invoice in the box'. While a collect request though UPI allowed a user to check only the amount and authorise the transaction, UPI 2.0 allows the payer to first view the invoice through a link, verify the details and only then authenticate the transaction.
Pre-authorised payment – Similar to a standing instruction, UPI 2.0 allows users to set a 'mandate' for a payment to be made at a later date, but where the intention to pay is definite. This can be used in scenarios where the consumer needs to show the intent to pay, but wants to wait till final delivery, or if he feels he might forget to pay on a particular date. Also, the consumer continues to earn interest on the amount till paid. The only drawback is that this feature cannot be used for recurring payments like utility payments.
The writer is business head, financial processing & licensing at Worldline South Asia and Middle East
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