NPCI’s interface to not include wallet accounts

The National Payments Corporation of India’s (NPCI’s) much-awaited unified payment interface (UPI), which is set to go live on April 11, will only consist of bank accounts and will not include wallet accounts, chief operations officer Dilip Asbe told FE.


The National Payments Corporation of India’s (NPCI’s) much-awaited unified payment interface (UPI), which is set to go live on April 11, will only consist of bank accounts and will not include wallet accounts, chief operations officer Dilip Asbe told FE.

The UPI is a common platform through which a person can transfer money from his bank account to any other bank account in the country instantly. The interface will be based on the Immediate Payment Service (IMPS) platform and can be availed by customers of banks that have agreed to provide the service.

This has cast a shadow of uncertainty about the relevance of online wallets going ahead. However, wallet companies believe that customers will still find a lot of value in the expereince offered by wallets and will continue using them even after UPI hits the ground.

“The important thing to remember is that it is still a matter of choice. I don’t think wallets will be phase out, everything will coexist. India is a big enough market for multiple avenues to coexist. There would still be people who like the experience of a wallet better and they will continue using that,” Asbe said. So far, 29 banks have come on board to offer UPI on their platforms although integration of the technology with their existing systems is yet to be completed. “We expect 5-7 banks to start offering the service from the day one. The rest will take time to go live,” Asbe said.

The UPI platform will combine all the bank accounts held by a single entity and will require only one step of authentication, which will be a unique ID. Instead of entering the 26-odd alphabets and numerals between the account number and the IFSC code, the customer has to only enter his/her unique ID to go through with the transaction. He need not provide details of either party’s account details as is the case with transferring funds online through net banking or mobile banking.

“Say you like the HDFC Bank mobile banking application the best but you bank with State Bank of India. You can download the HDFC Bank app and create your unique ID on it for your SBI account. Example – xyz@hdfcbank.com. UPI allows a customer that much room for personalization and convenience,” Asbe said.

Moreover, the UPI will also allow the recipient to initiate a transaction, contrary to the prevalent system which only allows a the person sending money to initiate a transaction. Asbe said that the idea behind this is that the receiver is always more interested in the transaction. In short, it will be India’s first “truly mobile-based” payment platform since all existing modes are card-based or account based.

What is left to be seen is whether or not banks will market UPI in a big way. The downside for them is that their fee income originating from such transactions might get impacted negatively since the fee coming from a transaction through UPI gets split between the bank in which the person holds an account and the bank whose application is being used to make the transaction. However, Asbe believes that the sheer increase in volumes of electronic transactions that UPI could bring about would more than offset that.