NPCI launches enhanced UPI 2.0 with overdraft facility

The National Payments Corporation of India (NPCI), the umbrella organisation for all retail payments in India, launched the updated unified payments interface (UPI) 2.0 on August 16.

The interface is expected to easy payment transactions for users.

"We are happy to witness the revolution brought about by UPI in the last two years. Large number of banks, merchants, third-party players and consumers trusted this platform which resulted in substantial growth in terms of volume and value of transactions since its inception," said Chief Executive Officer of NPCI Dilip Asbe.

The interface, launched in April 2016, is regulated by Reserve Bank of India (RBI) and works by instantly transferring funds between two bank accounts on a mobile platform such as BHIM, Google Tez or Paytm.

"UPI is a path breaking innovation that is unprecedented globally. Its high volume, low cost and highly scalable architecture built on an open source platform is key to India’s transformation to a digital payment economy,” said Nilekani.

The new version of UPI, in addition to current and savings accounts, will let customers link overdraft accounts to UPI. Customers will be able to transact instantly and all benefits associated with an overdraft account would be made available for users.

Another feature would allow customers to check their invoice sent by merchants prior to making payments. It will help customers view and verify credentials and check whether it has come from the right merchant or not. Customers can pay post verifying the amount and other important details mentioned in the invoice.

For signed intent and QR codes, customers would be able to check the authenticity of merchants while scanning QR code. It would notify the user with information to ascertain whether the merchant is verified UPI merchant or not.

This provides an additional security to the QR as well as intent. Transactions would be processed faster as app passcode is not required in case of signed intent. It negates the chances of QR tampering. Customers will be informed in case the receiver is not secured by way of notifications.

UPI 2.0 mandates are created with one time block functionality for transactions. Customers will now be able to pre-authorise a transaction and pay at a later date.

It works seamlessly for merchants as well as for individual users. Mandates can be created and executed instantly. On the date of actual purchase, the amount will be deducted and received by the merchant/individual user.

Present at the launch of the second version of UPI were RBI Governor Urjit Patel,  Advisor – Innovation, NPCI Nandan Nilekani, State Bank of India Chairman Rajnish Kumar and other senior bankers.

UPI 2.0 member banks currently are State Bank of India, HDFC Bank, Axis Bank, ICICI Bank, IDBI Bank, RBL Bank, Yes Bank, Kotak Mahindra Bank, IndusInd Bank, Federal Bank and HSBC.