Dear Readers,

The Unified Payments Interface was recently in news and could be important for your exams.

The National Payments Corporation of India (NPCI) will be launching it in April this year. It is an advanced payment system through which a customer with a bank account can transfer money and make payments almost as easily as s/he sends a text message. In this article, we will look at its brief background and some key features.


· NPCI is testing the product in collaboration with Axis Bank, and twenty-nine other banks have also agreed to provide UPI services to their customers from the first quarter of the next financial year.

· This will be one of the five products launched by NPCI in the upcoming financial year. These will include Bharat Bill Payment System (BBPS), electronic toll collections, RuPay credit-plus-debit card and tap-and-go transit card.

Key Features

· UPI will use a one-click, two-factor authentication for mobile phones across different bank accounts, enabling immediate transfer of funds.

· Customers will be able to use their mobile phone as the primary device for all forms of payments – person to person & person to entity, and entity to person.

· UPI will let customers use their Aadhar number, mobile number, card number and account number in a unified manner.

· The payments and collections will be carried out using aliases, or “virtual payment addresses”, which will be bound by payee/amount/time. Thus, the security will be much stronger.

· Collect requests sent to others will have a “pay by” date which will allow payment requests to be “snoozed” and paid later, but before the expiry date. This way, money will not have to be blocked until the customer is ready to pay.

· Similar to the Electronic Clearing System, UPI will allow pre-authorisation of multiple recurring payments (utilities, subscriptions, school fees, etc.), with a one-time secure authentication and rule-based access.

· All payment system players will be able to use

· Customers will be able to have PSP provided mobile applications, which will enable payment from any account using any number of virtual addresses, with the help of passwords or PINs or biometrics (on

· With so many features, the need to share

· In about one and a half year, smartphones will have the facility of biometric authentication, which will allow the customers to carry out transactions using their fingerprints. These prints will then be cross-checked with the Unique Identification Authority of India (UIDAI) database. After verification, the transaction will be instantaneous.

These are the major points to be remembered about the Unified Payment Interface. If you can understand these well, you can answer questions pertaining to it with greater ease.

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