NPCI’s technology disrupter UPI goes live

What Nandan Nilekani described as the Whatsapp moment in financial services has arrived with RBI giving the nod for the United Payments Interface to go live. As this platform allows money to be transferred across mobile banking apps, businesses and individuals are expected to rapidly find ways to use this for payments and use less cash.

Two key features of this platform are: UPI enabled apps are interoperable. What this means is that just as ATM of one bank can be used to access accounts of all banks in the network, any UPI-enabled app can be used to access accounts of other banks. Second, it overcomes one of the biggest pain points in sending money online — that of obtaining and entering 15-digit account numbers and 11 digit ifsc code. Instead of account details, the receiver has to merely share an alias like xyz@axisbank. Twenty one banks will be going live over the next couple of days. But largest bank SBI has expressed concerns and has kept on hold until he clarifies.

“Real-time sending and receiving money through a mobile application at such a scale on inter-operable basis had not been attempted anywhere else in the world. Now the UPI app will be made available on Google Play Store by banks,” NPCI Managing Director and CEO A P Hota said in a statement issued here today. Open Access, which is the use by a third-party of an existing financial network for payments has been implemented in certain sectors and in pilot projects in countries like Australia, Malaysia, Singapore, but not at the scale at which NPCI is rooting for. “While there are debates raging in the European Union as to the merits of open access, it is brilliant what NPCI has managed to implement in such a short timeframe,” Suresh Rajagopalan, president – software products, FSS.

Of the 21 banks, Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Oriental Bank of Commerce, Union Bank of India and Vijaya Bank have gone live.

“Our application is still under development. We have raised some security concerns on registration process and transactions timed out.NPCI has not yet come back. We will be ready by end-September. But decision to join will depend on NPCI coming back to us on clarifications sought,” said Manju Agarwal, deputy managing director, SBI.

ICICI Bank has announced that the bank will integrate its Imobile and Pockets application with UPI in the next few days. Imobile is for the bank’s customers while Pockets is an app with prepaid instrument available to anyone who downloads it.
Kotak Mahindra Bank has decided to play it safe and provide a separate application for UPI which is in the process of being launched. “We are in the process of development and certification of UPI enabled app. We are launching a new app which will be UPI-enabled in 4-6 weeks from now. There is significant scope in the payments space and we believe that it merits a separate app. The entire UPI ecosystem will work seamlessly once all banks have their UPI-enabled apps. Banks will have to take the effort of educating customers, as this is a new system and customers will take time to adapt to it,” Deepak Sharma, Chief Digital Officer, Kotak Mahindra Bank.

Earlier customers with smallers banks were at a disadvantage when it came to mobile banking and state-of-the-art apps. “UPI is a very innovative product that will result in a lot more users and higher online transaction volumes. Smaller banks, who don’t invest in IT as heavily as their larger counterparts, will now be able to offer its customers the same benefits as everyone else,” Rajagopalan, FSS.

Nilekani, an advisor to NPCI, has been one of the biggest champions of UPI. He has been pushing for UPI as part of the India stack — an entire range of digital services which includes Aadhaar for authentication, e-KYC , digital lockers and e-signatures that will enable all transactions to be done online.

One thought on “NPCI’s technology disrupter UPI goes live

  • August 29, 2016 at 12:25 pm

    It is a MAD, MAD, MAD, MAD, World !

    Not many will remember this hilarious Hollywood movie of a few decades back
    When the movie was nearing completion , it is said that the production team in charge of the movie got together to decide upon its name
    One team member suggested : Let us call it , ” It is a MAD, MAD , MAD , MAD , MAD world ”
    After a lot of heated arguments , the team concluded :
    ” Repeating the word ” MAD ” for the fifth time , would be clearly ” redundant ! ”

    Hindustan Times ( 29 Aug 2016 ) , carries a report : War on Black Money : It’s m-Wallets vs UPI
    Dilip Asbe , CEO , NPCI is quoted :
    ” UPI will be an enabler to existing wallets and in fact can be used to fund the wallets
    We have not got wallets under the UPI as it is designed for banks now. Also, wallets offer facilities beyond money
    transfer ”

    Question is : How many m-Wallets are too many ? Which is the next one , which would be ” redundant ” ?

    Purely out of self interest ( to increase their own business – and with no love lost for BLACK MONEY ! ) , expect hundreds of companies , in each of the following sectors , to come out with their own , branded m-Wallets :

    # E-Com companies ( Online Market-places ) / Credit – Debit Card Companies

    # Companies making Consumer Goods and even Consumer Durables

    # Banks / Insurance companies / NBFC / Hospitals / Railways

    # Large Retailers with nation-wide presence ( Ambani – Adani – Biyani – Walmart etc )

    # Mobile Service Providers / Power-Gas-Water-Internet Distribution Companies

    # Schools / Colleges / Universities / Coaching Classes

    # Online Entertainment / Service Delivery Companies / Consultancy Companies

    # In short , ALL companies trying to sell ( Goods or Services ) using a Mobile App

    There is no doubt , all of this will help billions of SMALL TICKET CASH transactions taking place daily , to become NON-CASH transactions

    But neither UPI , nor m-Wallets can :

    # Move 100,000 Currency notes of Rs 1,000 each , from safe deposit locker of the person buying land / property
    / gold etc , to the safe deposit locker of the person selling it !

    # Motivate a ” hafta collector ” to accept payment by m-Wallet from footpath vegetable vendor , even if it is a
    single Currency Note of Rs 500 /-

    # At a slightly higher level ( of Corruption ) , which local dada / goon / mafia , has official bank balance of Rs
    10,000 , even though his numerous safe deposit lockers are overflowing with Rs 500 / 1,000 currency notes ?

    # And at considerably higher level , any idea how many billions currency notes of Rs 500 / 1,000 are lying locked-
    up in the lockers of corrupt businessmen / industrialists / bureaucrats / politicians etc , beyond the reach of UPI
    or m-Wallets ?

    # Following figures will give you an idea :

    Latest available figures for currency notes in India :

    * Total number of notes ( Rs 1 onwards )…….. 76.5 Billion pieces ( = Rs 12468 Billion in Value )

    * Of the above , share of Rs 1000 notes………..39 % ( ie : Rs 4862 Billion , by Value )

    * And the share of Rs 500 notes……………….. 45 % ( ie : Rs 5610 Billion , by Value )

    * Share of Rs 1/2/5/10/20/50 / 100 notes…….. 16 % ( ie : Rs 1995 Billion , by Value )

    Therefore , it stands to reason that the predicted increase in those NON-CASH transactions ( going up to 59 %

    by 2025 ) , will mostly eliminate just 16 % of the TOTAL currency-value in circulation !

    There does not seem to be any likelihood of Mobile Wallets , encroaching on the balance 84 % of the currency !

    As I have repeatedly suggested , the ONLY way to bring to surface those Rs 500 / 1,000 Currency Notes , is to

    embed these with RFID micro-sensors !

    I hope , someday , some powerful , non-corrupt , honest ( and dictatorial ? ) Policy Maker will show the courage to



    29 Aug 2016 / blogs

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