In 2016, former RBI Governor Raghuram Rajan launched the cashless payments platform, UPI (Unified Payments Interface). The inter-bank fund transfer platform is operated by the National Payments Corporation of India (NPCI), and it allows for instant funds transfer. The use of UPI rose after demonetization. In fact, last month, 247 million UPI transactions were recorded with a total of Rs 40,834 crore were transferred. Now, the platform is set to get an upgrade with new features.
According to a report on Inc42, UPI 2.0 is expected to launch on July 13. Another report on ET hints that the daily transaction cap could be hiked from Rs 1 lakh to 2 lakhs. However, RBI hasn’t approved ‘standing instruction’ on UPI yet, something that was supposed to be one of the pioneering features. “While the necessary approvals from the RBI have arrived, the standing instruction feature has not been approved,” a senior banker told ET under anonymity.
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With the ‘standing instruction’ feature, users can instruct banks to debit their accounts regularly for repeat transactions, something similar to auto-debit facility for mutual fund investments or loan repayments. NPCI was looking to introduce a feature that could save the hassle of manually authorizing such repeated payments.
“I think the central bank could have felt that such a feature would be contrary to the two-factor authentication that the RBI has mandated for digital payments within India, hence no approval,” a banker told ET.
Talking about the expected features, UPI 2.0 could bring an overdraft facility for getting invoices attached with payment requests. A ‘block payment’ feature is also expected, something that users can use for buying stock IPOs, getting cab rides or for e-commerce deliveries.
For instance, if you place an order for a smartphone which costs Rs 5,000, the amount will be blocked from your bank account, instead of instantly deducting it. It will only be debited once the delivery is complete. Lastly, it was also expected to get biometric payment authentication feature, but due to privacy concerns related to Aadhaar, it has been withdrawn. UPI 2.0 sounds interesting, and we can’t wait for the official rollout to begin.