The National Payments Corporation of India (NPCI) launched Unified Payments System (UPI), a peer-to-peer payments system in August 2016. Now, almost two-years later, NPCI is expected to launch the upgraded version, UPI 2.0, on July 13. And while the current payment system promotes peer-to-peer payments, UPI 2.0 could bring nifty features to promote merchant transactions.
RBI had proposed to add e-wallets as a part of the upgraded platform, but that is not happening. It will only allow bank accounts to be used for payments. The Reserve Bank Of India had also proposed to include biometric payment option using Aadhaar database, but given the risk involved, the feature may not see the light of the day anytime soon. Here’s a look at some of the expected features of UPI 2.0.
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5 ways UPI 2.0 will change digital payments in India
Increase in transaction limit
Currently, UPI allows you to send up to Rs 100,000 a day, with a maximum of 20 transactions per day. With UPI 2.0, the transaction limit will be doubled to Rs 200,000.
Aimed at merchants, this is one feature that can come in handy, allowing merchants to block certain amount from client’s account, and debit it later. How will this work? Suppose you are going on a holiday, and booked a hotel, that particular amount will be blocked on your bank account, and once your stay is over, it will be debited. The same could apply for e-commerce purchase too. When you order a product, the said amount will be blocked, and after the delivery is complete, the amount will be released.
Sending an invoice
This is yet another feature aimed at merchants. Say you are a customer who visits a shop to purchase a product, and make payment using UPI. Once the merchant receives the payment, an invoice for the same can be generated and sent to the customer.
Currently, UPI only lets you link your savings account, but with UPI 2.0 platform, you would be able to link an overdraft (OD) account too. Again, this feature will help merchants take credit using their overdraft account for making a transaction.
Secure QR-code payments
Lastly, the QR-core on UPI 2.0 will include a certificate, thus ensuring that the money transferred goes in the right account.
The digital payments system has seen a good growth in India, especially in the month of June with volumes soaring over 30 percent. According to the data released by NPCI, UPI transactions for the month of June stands at 246 million, compared to 189 million in May.