UPI - ECONOMY
News: UPI-PayNow
linked to ease payments with Singapore
What's in the news?
● India’s
Unified Payments Interface - better known as UPI and Singapore’s PayNow were
officially connected, allowing for a “real-time payment linkage”.
Key takeaways:
● Singapore has now become
the first country with which cross-border
Person to Person (P2P) payment facilities have been launched.
● This
will help the Indian diaspora in Singapore, especially migrant workers/students
and bring the benefits of digitalization and FINTECH to the common man through instantaneous and low-cost transfer of
money from Singapore to India and vice-versa.
● UPI
payments through QR codes are already taking place in Singapore, though at a
limited number of outlets.
Unified Payment Interface (UPI):
● It
is a common platform through which a
person can transfer money from his bank account to any other bank account in
the country instantly using nothing but his/her UPI ID.
● It
is developed by the National Payments
Corporation of India (NPCI) under the guidelines of the RBI.
● The
interface is based on the Immediate
Payment Service (IMPS) platform.
● UPI
is a payment system that allows money transfer between any two bank accounts by
using a smartphone.
● UPI
allows a customer to pay directly from a bank account to different merchants, both online and offline, without the
hassle of typing credit card details, IFSC code, or net banking/wallet
passwords.
● The
UPI app merges a number of banking features, facilitating seamless and secure
fund transfer and merchant payments at a single platform.
● It
also allows Peer to Peer collection
requests.
● Launched
in 2016.
How will it work?
● A
customer can transfer money to another person through a unique virtual address,
or mobile number, or Aadhaar. Therefore, customers do not need to know the
payee’s IFSC code, bank account details, etc. and this will make the process
simpler.
● A
customer can have multiple virtual
addresses for multiple accounts in various banks. There is no account
number mapper anywhere other than the customer’s own bank. This allows the
customer to freely share the financial address with others.
Go back to basics:
National Payments Corporation of India (NPCI):
● NPCI
is an umbrella organization for operating retail payments and settlement
systems in India.
● It
is an initiative of the Reserve Bank of
India (RBI) and Indian Banks Association (IBA) under the provisions of the
Payment and Settlement Systems Act, 2007 for creating a robust Payment and
Settlement Infrastructure in India.