The UPI saw more than 287k transactions in November

The total number of transactions on the Unified Payments Interface stood at 287,388 for the month of November. The volume of the UPI transactions amounted to Rs 902,282,385 (Rs 90.2 crore), as indicated by the Reserve Bank of India (RBI).

Note that the National Payments Corporation of India (NPCI) has not provided data regarding the number of virtual payment addresses (VPA) created which could be indicative of the number of users on the UPI. In September, ICICI Bank said that it has more that 1 million VPAs.

When the UPI was launched in August, many (wrongly) commented that digital wallets would be hit. Commentators said that banks would integrate the UPI app with their own mobile banking app which will allow us to create VPAs directly linked to bank accounts and store the VPAs of people who we want to transact with. This could be people or businesses or entities we frequently transact with. Thereafter, paying any of these persons or entities will just involve sending a text on this app with a direction to pay to or withdraw from.

From RBI’s provisional data for November, PPIs and wallets showed 59 million transactions (this is for only 8 players and there are 48 players who have a PPI licence).

The VPA acts as a financial address for a user instead of their 16 digit bank account number and the 11 digit IFSC code. Once registered for VPA, bank account holders can send and receive money from their smartphones without the need to enter bank account information or net banking user id and password.

There are currently 30 banks who are on the UPI which includes State Bank of India (SBI), ICICI Bank, HDFC Bank, Axis Bank, YES Bank etc, who all have individual mobile banking apps for the same.

UPI 2.0

The NPCI is expected to launch a second version of the UPI by March 2017 and  will pre-authorized transactions through digital signatures and biometric authentication and integrate Aadhaar. The first version allows inter-operability wherein a banks customer will be able to use the mobile banking services of another bank. For example, if you have a bank account with, say Canara Bank, and you want to use ICICI Bank’s mobile banking services, you can that using ICICI Bank’s mobile app, by creating a virtual address linked to your Canara Bank account. The UPI unbundles the account from the bank. The catch here is that the bank needs to be on the UPI.