This is the new mantra catching up with the common Indian. A cash driven economy has suddenly moved forward in the direction of digital payments. The basic framework by the Govt was already in place. What was lacking was a push in the forward direction. This was provided again by the govt in the form of the demonetisation drive. Here are a few basic terms related to the cashless phenomenon.
National Payments Corporation of India
NPCI for short is the organisation formed by the Govt of India for digital payments. It was created by joint efforts of RBI and Indian Banks Association. NCPI primarily deals with bringing together all retail payment systems and to provide an interface for people to transfer money digitally.
NCPI has brought in a Domestic Card Payment Network called RuPay on lines of international payment networks like VISA or MasterCard.
NCPI has introduced IMPS or Immediate Payment Service which is a real time remittance service. It can be used on a variety of devices like Mobile Phones, PCs and ATMs.
Source : http://www.npci.org.in/aboutus.aspx
But the feather in the cap of NPCI is the UPI or Unified Payments Interface.
Unified Payments Interface (UPI)
UPI was launched in April 2016. So at the time of writing of this article, Dec 2016, this project has barely completed six months of existence. Participating banks have to integrate UPI in their smart phone app to be made available on Google Play Store for Android Smart Phone users. This process commenced in August 2016. So one can safely assume that the demonetisation drive launched by the Govt was to give a push to UPI too.
Basic steps to start using UPI
- You need to have an Android based smartphone with your bank app installed.
- The registered mobile number should be on the same device.
- If the phone is dual SIM, then the default SIM should be that of your registered mobile number with your bank.
As a final step you get your own unique UPI ID in the format of [email protected] where xxxx stands for your own unique name and HDFCBANK will be your bank name as applicable.
This UPI ID can be shared with anyone to send or receive funds. Your smartphone is now not only your bank, but it is now able to transfer money across banks and networks.
Two factor authentication is built in by default since you will receive alerts through your registered mobile number from the bank. The rest will be taken care by the bank app.