Economic Times: December, 2016
New Delhi: The Centre plans to breathe new life into two key initiatives that can help further its aim of transforming India into a digital economy. The United Payment Interface (UPI) and Align | Delete Unstructured Supplementary Service Data (USSD) will soon be launched in new avatars that will make it easier for consumers to transact digitally either with or without an Internet connection.
In a week's time, a new strippeddown, easier-to-use application for UPI will be launched, that among other things will feature a single app that users can download to transact across multiple banks. Also being launched is an upgraded, feature-rich version of USSD platform, which enables banking through feature phones.
Since the demonetisation drive announced on November 8, the number of daily transactions on the UPI platform has "doubled to 70,000 with 4.2 million registered users", according to AP Hota, MD of NPCI which hosts the two platforms and handles all retail payments in the country.mob copy
"But we are not very happy. 70,000 is not really a number to be satisfied with. We believe that in the days ahead, further improvement can happen," National Payments Corporation of India MD AP Hota told ET.
The adoption of UPI, launched in August, has been hamstrung, among other things, by the lack of a common application. So far, about 33 banks have signed up on the platform and each has its own application, which users can download individually off the Google Play Store or the Apple App Store. The new version will provide a common application that will simplify the use of the platform.
"In due course, when more functionalities are added, we hope that instead of upgrading their individual apps, banks may switch over to the common app," said Hota.
The new app, however, won't replace the existing ones. It will be in the form of a skeletal version of the apps already present, with basic features such as ability to send or receive money, linking of accounts, saving profile of the user, changing the language, recording beneficiary details and providing balance enquiry. Banks can either endorse the common app or only allow their customers to use the in-house app which may be loaded with more features.
Industry watchers argue that while a common UPI app will increase convenience, a lot more needs to be done to popularise the platform. "It needs to be opened for prepaid instruments firms authorised by RBI, since banks are not exactly the best examples of marketing," said Vishwas Patel, chief executive officer of CCAvenues, a payment gateway.
RISE IN USSD TRANSACTIONS
To further bolster the USSD platform, NPCI is mooting its integration with UPI. Currently, around 51banks support USSD and the number of transactions has jumped from 1.5 lakh per day before demonetisation to 6.5 lakh per day now.
One of the biggest challenges that NPCI faces with the platform is that the bulk of transactions, about 98%, involve no transfer of money. For instance, by dialing *99# from their bank-registered mobile numbers, users can check their balance. Hota said that now around 5,000 transactions are happening per day on USSD that involve transfer of money.
"The new platform will integrate much more deeply with the feature phone where it can not only send money but initiate a collect money request from a person or agency along with saving beneficiary details and the preferred language, so that users do not have to select it each time they operate USSD," said Hota. USSD is currently available in 12 Indian languages apart from Hindi and English.
The pricing of UPI-based transactions should also be made transparent, say industry members."Currently, each payment gateway has its own pricing, but that has to be standardised and made transparent," said Nitin Gupta, who cofounded PayU Money, adding that this will significantly help in making the platform more mainstream.