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Tag: Unified Payment Interface

  • India Becomes World Leader in Fast Payments — Speed Beats All

    According to an IMF statement, the rapid expansion of UPI has allowed India to surpass all other nations in terms of payment speed, while the use of traditional payment methods, such as credit and debit cards, is decreasing.

    The NPCI created the Unified Payments Interface, a real-time and instantaneous payment system, to enable mobile phone interbank transactions.

    According to the IMF’s Fintech Note, “Growing Retail Digital Payments: The Value of Interoperability,” UPI has expanded rapidly since its inception in 2016, while some stand-ins for cash usage have started to fall.

    India Now Processes 18 Billion Transactions Per Month

    “India currently pays more quickly than any other nation. Cash usage proxies have decreased concurrently,” the note stated. Using granular data spanning the universe of transactions on India’s UPI, an interoperable platform that has grown to become the largest retail quick payment system globally by volume, the note provides evidence in line with this methodology.

    According to the fintech report, UPI has expanded rapidly since its 2016 inception, although other indicators of cash usage have started to fall. In India, UPI currently handles over 18 billion transactions monthly and is the most popular electronic retail payment method.

    Fintech Notes provide policymakers with useful guidance on significant topics from IMF staff members. According to the report, interoperable payment systems like UPI offer an alternative to closed-loop systems and may encourage the use of digital payments. Users of various payment providers can make payments with ease thanks to these platforms.

    Digital Payments Outrun Cash Withdrawals

    The report went on to say that it is challenging to estimate cash usage since, particularly in the informal sector, cash transactions might take place anonymously and may not be documented in any ledger. “But we can estimate cash usage with the value of automated teller machine (ATM) withdrawals in each district,” the note continued. “A very similar picture emerges when we compare the effect of integration on transaction values to cash withdrawals,” it added.

    According to the note, areas that experience higher rises in de facto interoperability see a significant and sustained increase in the total number of digital payments compared to cash withdrawals following integration.

    According to this data, interoperability can help promote the shift away from cash and the use of digital payments. Maria Soledad Martinez Peria, Divya Kirti, and Alexander Copestake wrote the fintech note.

    The authors added that regulators should keep an eye out for the rise of dominant private providers and be ready to intervene to preserve a completely open, interoperable, and competitive system as the interoperable platform develops and additional providers join.

    According to the note, the system operator should ensure that its design decisions support the interoperable ecosystem’s health at every stage of development by consulting with existing and prospective private sector partners.

  • UPI Heads to Africa: NPCI Signs Landmark Deal with Namibia’s Central Bank

    In order to create a real-time payments platform similar to the Unified Payments Interface (UPI), the Namibian central bank and the National Payments Corporation of India (NPCI) have inked a licensing deal.

    According to Dammu Ravi, secretary in the external affairs ministry, during a press briefing on the outcomes of Prime Minister Narendra Modi’s visit to the African nation, NPCI and the Namibian central bank have signed a licensing agreement to implement UPI in Namibia for real-time payments, making it the first country of its kind in the world.

    Namibia would be able to create a real-time payment system thanks to the agreement. Notably, more than a year ago, the Bank of Namibia and NPCI International Payments Limited (NIPL), the organisation’s international arm, originally inked a deal to create a digital payments system.

    India Agrees for Transfer-of-Technology

    As part of the collaboration, the NPCI committed to providing the Bank of Namibia with technology and other knowledge to aid in the creation of a digital payments system. In an effort to boost UPI use globally, the NPCI has inked agreements with a number of nations.

    The NIPL and Trinidad and Tobago’s ministry of digital transformation collaborated on the same project in September of last year. Before that, it was negotiating with South American and African nations to assist them in developing digital payment systems such as the UPI.

    The UAE’s Network International and the NPCI joined in July 2024 to enable Indian tourists to use UPI at a number of locations throughout the Gulf country. As a result, a number of nations, including France, the United Arab Emirates, Bhutan, Nepal, and Singapore, now accept UPI payments.

    UPI Expanding its Nexus

    The NPCI is still working to expand UPI in order to reach its daily goal of one billion transactions.

    In order to facilitate UPI payments through smart devices such as wearables, connected cars, and smart applications, the payments body is developing an Internet of Things version of the real-time payment system.

    Last month, there were 18.40 billion UPI transactions, totalling INR 24.04 lakh crore. For India’s fintech infrastructure, the recent collaboration with Namibia is undoubtedly a significant victory.

    The UPI system, which has been praised for being accessible to all societal levels in India, is now beginning its global expansion and creating opportunities for other countries to follow.

    Johannes Gawaxab, the governor of Namibia’s central bank, had earlier underlined that the goal of implementing UPI is to guarantee the deployment of a safe and effective national payment system in Namibia in addition to promoting financial inclusion and reducing reliance on cash.

  • UPI Slips Slightly: Transactions Dip to 18.40 Billion in June

    Transactions using the Unified Payments Interface (UPI) fell slightly to 18.40 billion in June from an all-time high of 18.68 billion the month before. Compared to the previous year, the number of transactions increased by 32%.

    Compared to the 17.89 billion transactions that were reported in April, the number of transactions in the month under review is 2.9% greater. According to data made public by the National Payments Corporation of India (NPCI), UPI transactions totalled INR 24.04 Lakh Cr in June, a 4.4% decrease from the INR 25.14 Lakh Cr transactions that were reported the month before.

     In contrast, the average daily transaction count increased from 602 million in May to 613 million in June. In addition, INR 80,131 Cr was the average daily transaction value.

    India Leading the Global Digital Payment Race

    India is currently working on improving UPI’s efficiency, even though it is already at the forefront of the digital payment race and helping other countries to catch up.

     According to Finance Minister Nirmala Sitharaman, who was speaking at the Digital Payments Award 2025, India currently makes up 48.5% of the world’s real-time digital payments, and the Unified Payment Interface (UPI) ecosystem has over 35 Cr users. She added that a few merchant shops in seven countries, including Bhutan, Nepal, Mauritius, Sri Lanka, the UAE, Singapore and France, currently accept UPI.

    The NPCI implemented new rules last month to speed up the processing of UPI payments. Remitter banks, beneficiary banks, and payer and payee payment service providers (PSPs) have been instructed to cut the response time for UPI APIs started by the NPCI to as little as 10 seconds for specific transactions in accordance with the new regulations.

    Speculations on MDR

    The government may impose a merchant discount rate (MDR) on UPI transactions exceeding INR 3,000, according to a report. The finance ministry, however, denied the allegations and referred to the study as hypothetical, unfounded, and deceptive.

    Prime Minister Narendra Modi received a letter earlier this year from the Payment Councils of India (PCI) urging him to reevaluate the 0% MDR policy for RuPay and UPI transactions.

    Ministry further stated that nation’s people are unnecessarily apprehensive, afraid, and suspicious as a result of such sensational and unfounded rumours. The government is still totally committed to encouraging digital payments through UPI.

    When banks or payment service providers handle digital transactions through UPI, they charge merchants a fee known as the MDR. To encourage digital payments across the nation, the price was reduced to zero in 2020. However, many people think that the lack of MDR has tempered interest in making additional investments in digital infrastructure.

  • SEBI Unveils ‘Valid’: UPI Fraud Buster for Safer Market Deals

    After considering industry input from consultations and evaluating market participants’ preparedness, regulator SEBI announced the “Valid” mechanism on June 11, which will give market intermediaries a unique Unified Payments Interface (UPI) address to collect money from clients.

    According to Tuhin Kanta Pandey, Chairman of SEBI, the innovative UPI payment system will launch on October 1, 2025. According to Pandey, by offering a validated and secure payment channel, this novel mechanism is expected to greatly increase the security and accessibility of financial transactions inside the securities market.

    Market intermediaries can use SEBI’s special and secure investor payment system, called “Valid”, to collect money from customers for payments to brokers, mutual funds, research analysts, investment advisers, and other parties.

    SEBI Issuing Circular Asking Intermediaries to Promote Valid Among Their Investors

    The SEBI has released a circular on the subject, stating that although investors will not be required to use this structured UPI method, intermediaries must acquire and provide their investors with this structured UPI address.

    Furthermore, it is recommended and encouraged for intermediaries to actively support and facilitate their investors’ adoption of this technique. Banks only issue “Valid”, a distinct payment ID based on the Unified Payments Interface (UPI), to organisations that are registered with SEBI. To make it easier for investors to identify the regulated entities, their UPI IDs will contain the handle name “@valid” along with the bank name.

    To demonstrate the authenticity of the transaction, a triangle with a green thumbs-up emblem will also be highlighted. For instance, the handle would be abc.brk@validhdfc if it was for a broker named ABC and funds were to be collected using HDFC Bank’s UPI platform. Likewise, it will be abc.mf@validhdfc for a mutual fund.

    After consulting with banks, the National Payments Corporation of India (NPCI), and market participants such as brokers, the regulator created the “Valid” payment mechanism. The system protects investors from scammers and guarantees that they only pay to legitimate SEBI-registered businesses.

    Because there won’t be any fraud, both registered entities and investors will benefit. Intermediaries will be paid more quickly, and investors will know they are paying a legitimately regulated company. For capital market transactions conducted using UPI, the market regulator has set a daily cap of Rs 5 lakh, which may be periodically reviewed in cooperation with the NPCI.

     In 2019, the Unified Payments Interface (UPI) was first made available to the public as a payment method by SEBI. Because of UPI’s effectiveness and great track record, it has been incorporated into numerous other procedures.

    Move will Curb Unregistered Entities

    In its consultation paper, the regulator said that numerous unregistered businesses had deceived investors over the years by collecting money without authorisation, most of which was then syphoned off for their own personal benefit.

    In order to allow investors to find a SEBI-registered intermediary and make the necessary payments to them in a more practical, effective, and lawful manner, it felt the need to aggressively limit the growth of unregistered firms.

    In an effort to further empower investors, SEBI also unveiled the “SEBI Check” tool. “SEBI Check” is a new feature that SEBI is creating. With the use of this new technology, investors will be able to confirm the bank details, including the IFSC and bank account number of a registered intermediary, and validate the authenticity of UPI IDs by manually entering the UPI ID or scanning a QR code.

     It is anticipated that this new system will provide important advantages such as improved investor protection, an additional layer of security, and the ability for investors to confirm an entity’s legitimacy prior to making any financial transactions.

  • For More Streamlined Payments, RBI Increases UPI Lite Limit

    On September 9, 2024, the Reserve Bank of India amended the Unified Payment Interface (UPI) limitations, which were previously set at INR 2,000 and now stand at INR 5,000.

    The Reserve Bank of India’s governor, Shaktikanta Das, announced that the Monetary Policy Committee (MPC) had decided not to alter the repo rate and that instead, the central bank would be raising specific restrictions for different types of transactions. “We have decided to increase the UPI lite wallet limit from INR 2,000 to INR 5,000 and the per transaction limit from INR 100 to INR 500.” “We have decided to increase the per transaction limit in UPI123Pay from INR 5,000 to INR 10,000,” Das added.  According to Das, the action is intended to promote the broader use of UPI and improve its accessibility and convenience.

    Appreciating this move, Kaushik Chatterjee, Founder & CEO of Unifinz Capital India Limited, stated, “The RBI’s decision to enhance UPI limits will encourage users to use it more frequently and make it more inclusive. Borrowers who were restricted by the transaction limit of UPI will now be able to pay higher loan instalments up to INR 10,000 through the UPI. At Lending Plate, where our customers are more comfortable making payments through UPI, this move will be a blessing for them. The increase in UPI limits shall boost the recovery efficiencies of every lending nonbank and, more significantly, the digital lenders whose loan size is smaller and so their loan instalments. Moreover, borrowers, by paying more promptly because the payment option now becomes more friendly with this move, will see their credit history improving, and that will have a positive bearing on the overall lending ecosystem.” 

    Similar thoughts were shared by Vikkas Goyal, Founder of Rupee 112; he said, “The RBI’s decision to increase the UPI Lite wallet limit and raise the transaction cap for UPI 123Pay represents a transformative step toward greater financial inclusion. For fintech platforms like us, this move enhances our ability to offer seamless and secure loan disbursement to salaried professionals across India. By leveraging UPI, we can streamline the loan disbursement process, making access to emergency loans faster and more efficient. The emphasis on strengthening cybersecurity is timely, and as we continue to expand, safeguarding customer data will remain a core priority for us.”

    “The UPI transaction limit hike is a game-changer for digital lenders, especially those like Bharatloan that focus on bridging financial gaps for the underserved. This development enhances our ability to offer seamless, paperless loan disbursement and collection processes for our customers, allowing them to manage their financial needs with greater ease. While the RBI has rightly raised concerns around underwriting practices, we are committed to continually improving our risk management protocols to ensure responsible lending as we scale. We welcome these progressive changes that will support both growth and stability in the digital finance space,” opined Amit Bansal, Founder of Bharatloan. 

    For People Using Non-Smart Phone/Feature Phones

    The revision of the UPI limit for UPI123 Pay is beneficial to those who use feature phones or non-smart phones. The RBI has raised the current payout threshold for this category to INR 10,000. People who want to use UPI for digital payments but don’t have internet access generally use this function. In order to use this service, customers must enter their 4- to 6-digit transaction pins.

    With UPI123 Pay, users with feature phones (i.e., non-smartphones) can quickly and easily make payments utilising the Unified Payments Interface (UPI) payment service without needing to access the internet. The goal of this service is to reach the 400 million feature phone users in the nation while being more inclusive. In addition to using Dual Tone Multi-Frequency (DTMF) signalling technology and adhering to the UPI two-factor authentication protocol for transactions, the service also requires an account number and phone number.

    Users will need to set up a UPI ID on their feature phone in order to utilise the UPI123PAY service. 

    • Step 1: Enter *99# and select the name of your bank.
    • Step 2: Enter your debit card’s last six numbers as well as the number of expiration.
    • Step 3: Following this, you’ll be prompted to create a UPI pin.
    • Step 4: The UPI ID will be activated after your UPI pin has been set.

    Enhancing the Usage of UPI Lite Wallet

    With their UPI Lite wallets, users may now make payments up to INR 5,000. Previously, the limit stood at INR 2,000. Similar to a digital wallet on your smartphone, UPI Lite caters to small-scale transactions. This payment mechanism operates without the need for the primary banking infrastructure. Users can store a balance limit (INR2,000 earlier) with UPI Lite. Customers can use this updated balance of INR 5,000 for low-value transactions. The RBI increased the per-transaction limit for this mechanism from INR 100 to INR 500.

     You can replenish the wallet’s balance when it runs out by using the associated bank account. Das stated that the MPC has chosen to maintain the repo rate at 6.50% for the 10th consecutive time during the announcement. People often accept that repo rates represent interest rates on loans to commercial banks.

    “The move will enhance the customer experience by allowing larger value transactions with lower failure rates. In addition, this will reduce the strain on the payment gateways and servers as more transactions will be conducted using the UPI Lite – a system which does not require a two-factor authentication. From a technical standpoint, this offers tremendous benefits as it minimizes downtime risks because less frequent database hits for authentication and processing will lead to greater stability of the system. It also creates opportunities for FinTech businesses to optimize backend infrastructure to support a larger number of transactions at minimum additional cost. The business will also have to spend less on server and bandwidth-associated costs improving the green footprint of the company,” stated Dipal Dutta, CEO and founder- RedoQ.

    NPCI International to Establish Trinidad & Tobago’s UPI-Like Payments Platform
    To create a real-time payments platform for Trinidad and Tobago that is similar to the Unified Payments Interface (UPI), NPCI International Payments (NIPL) and the Ministry of Digital Transformation (MDT) have partnered strategically.
    The first country in the Car
    StartupTalkyNitin Konde