Mobile wallets such as Paytm, MobiKwik and Citrus Pay will be looking to be a part of the NPCI’s Unified Payments Interface (UPI). The UPI will be launched today and so far has 29 banks signed on its platform. However, a report from the Financial Express says that so far the UPI will include only bank accounts and not wallet accounts.
The UPI is an additional layer of payments architecture built upon the IMPS mobile payments system which will allow customers to transfer money across different banks with the use of a single identification and password. Through this, multiple bank accounts can be be linked to a single mobile banking application and money can be both received and requested through the same interface.
What it can do
UPI will allow payments only by providing an address with others without having ever provide account details or credentials on third party applications or websites. This will be done through virtual payment addresses that are aliases to bank accounts. In addition, the UPI will provide pull payments where a user can request money from another user for funds.
The draft paper on the UPI also said that it would provide interoperability between different payment systems. For example, through the UPI, a Paytm customer can make a payment to an HDFC Bank’s customer directly into their account.
It is widely believed that the ease of payments in the UPI can change the micro payment landscape, pushing electronic payments to small merchants.
Flipkart’s acquisition of Phonepe
Indeed, Flipkart earlier this month bought payments company PhonePe focused on the UPI. Announcing the acquisition, Binny Bansal, CEO of Flipkart, said slow adoption of digital payments has been one of the biggest hurdles for mass adoption of online shopping in India.
PhonePe was started by three former Flipkart employees Sameer Nigam, Rahul Chari and Burzin Engineer in December 2015. PhonePe is yet to launch a product but it says that it is the first payments company to utilize the UPI.