Mumbai: Big blow by RBI unified payment interface (UPI) has the potential to take up to 100 crore transactions a day on the platform National Payments Corporation of India (NPCI) MD & CEO Dilip Asbe. The two key measures include enabling small transactions through ‘on-device’ e-wallets is i The app, which locks money in a separate account, while the other is to enable UPI payments on the feature phone.
UPI transactions have topped Rs 400 crore a month, driven largely by transactions in smaller cities, where sending and receiving money becomes easier in the absence of other electronic payment infrastructure. The downside of UPI is that every small transaction, including a payment of Rs 5, is treated as an electronic withdrawal from the bank account. This requires sending an SMS to both the sending and the receiving bank and it appears as a debit entry in the passbook and statement. More than that, the actual cost is the load that falls on the core banking system as each payment message has to hit the servers of the two banks to complete the transaction.
While the details are not yet clear, industry people say that the on-device e-wallet will require the owner to transfer some money from their bank account to the UPI e-wallet in the app. Money thus blocked can be used to make small-value payments without having to make phone calls to the payee bank server and payee bank server before the payment message is confirmed to the recipient of the payment message. Bankers compare it to prepaid cards used in transportation like Metro, except that it will work with any UPI provider. The on-device e-wallet will also reduce the dependency on telecom networks, as in future, customers can use NFC to transfer funds from their on-device UPI e-wallet to the recipient’s device.
RBI has also allowed banks to pay for IPO subscriptions and buy government bonds up to Rs 5 lakh from the central bank – which is higher than the current level of Rs 2 lakh. Announcing the facility, RBI Governor Shaktikanta Das said that IPO applications of Rs 2-5 lakh constitute about 10% of subscription applications.
UPI transactions have topped Rs 400 crore a month, driven largely by transactions in smaller cities, where sending and receiving money becomes easier in the absence of other electronic payment infrastructure. The downside of UPI is that every small transaction, including a payment of Rs 5, is treated as an electronic withdrawal from the bank account. This requires sending an SMS to both the sending and the receiving bank and it appears as a debit entry in the passbook and statement. More than that, the actual cost is the load that falls on the core banking system as each payment message has to hit the servers of the two banks to complete the transaction.
While the details are not yet clear, industry people say that the on-device e-wallet will require the owner to transfer some money from their bank account to the UPI e-wallet in the app. Money thus blocked can be used to make small-value payments without having to make phone calls to the payee bank server and payee bank server before the payment message is confirmed to the recipient of the payment message. Bankers compare it to prepaid cards used in transportation like Metro, except that it will work with any UPI provider. The on-device e-wallet will also reduce the dependency on telecom networks, as in future, customers can use NFC to transfer funds from their on-device UPI e-wallet to the recipient’s device.
RBI has also allowed banks to pay for IPO subscriptions and buy government bonds up to Rs 5 lakh from the central bank – which is higher than the current level of Rs 2 lakh. Announcing the facility, RBI Governor Shaktikanta Das said that IPO applications of Rs 2-5 lakh constitute about 10% of subscription applications.
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