Over the past couple of months, we have been hearing reports about NPCI working on the upgraded version of Unified Payments Interface (UPI), called UPI 2.0. It was expected to launch around mid-July, but the launch had been pushed back as it did not meet expectations of industry experts. Now, reports suggest that NPCI could roll out the upgraded version sometime around mid-August.
According to a report in the EconomicTimes, NPCI is looking at a date around August 15 for the launch, and expecting a senior RBI executive to officially launch it. “Around 10 banks are ready with limited functionalities on UPI 2.0. Even if NPCI goes ahead with the launch with limited set to banks, for all of them to launch full functionalities, it will take another four months,” a senior banker familiar with the developments told the publication.
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UPI 2.0 was expected to be a revolutionary product, designed keeping merchants in mind, and help grow the retail payments space. However, it has hit a few roadblocks as RBI has not given the required clearance for the launch. One of these is the standing instructions feature which could allow recurring payments such as loan EMIs, SIPs, mutual funds, and more to move to smartphone-based payments platform.
Due to the risk factors attached with the standing instructions feature, RBI has held back from giving the required permissions. India still has low level or awareness around digital transactions, and RBI fears that if people are not careful in giving auto debit mandate, their accounts can be swiped clean in one go.
Still, not having standing instructions payment feature is a big miss as it could have helped to open new used cases, and thrive merchant payments. Bankers further told the publication that UPI platform currently has more than 100 banks live, and rolling out all the features across all banks will take time.
UPI 2.0 will also bring overdraft facility, which will allow users to use their connected account as a virtual credit card. Also, using the block feature, users will be able to buy stocks during IPO. Sure, the UPI 2.0 features look interesting and we will have to wait and see which of these finally make it to the release version.