NPCI launches UPI 2.0 with overdraft facility

New Delhi: After a delay of several months, an upgraded version of the Unified Payments Interface (UPI), UPI 2.0, was launched on Thursday at a private event in Mumbai. Select members from the National Payments Corp. of India (NPCI), banks and the Reserve Bank of India (RBI) were present at the event. RBI governor Urjit Patel, State Bank of India (SBI) chairman Rajnish Kumar and Nandan Nilekani, the non-executive chairman of Infosys Ltd, and the innovation advisor at NPCI, formally launched the product.

NPCI is the umbrella organization for all retail payments in the country. It also manages the UPI mobile platform, which facilitates instant fund transfers between two bank accounts, without revealing the details of the accounts.

Several features were added to UPI 2.0, including an overdraft facility, which enables customers to link their overdraft account to UPI and carry out transactions instantly. The one-time mandate feature allows customers to pre-authorize a transaction and pay at a later date, while the invoice in the box feature allows customers to check the invoice sent by merchants prior to making a payment. The signed intent and QR feature enables customers to check the authenticity of merchants while scanning QR codes.

“Large number of banks, merchants, third-party players and consumers trusted this (UPI) platform, which resulted in substantial growth in terms of volume and value of transactions since its inception. With the launch of UPI 2.0 we hope to touch new milestones by expanding UPI’s presence especially in the person-to-merchant payments space,” said Dilip Asbe, managing director and chief executive officer, NPCI.

As of now, 11 banks, including SBI, HDFC Bank, Axis Bank, ICICI Bank and IDBI Bank, have integrated with UPI 2.0, said NPCI in a statement. According to Nilekani, 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, and is key to India’s transformation to a digital payment economy.”

Although the much-expected recurring payments feature is missing from UPI 2.0, it comes with several improvements, said Harshil Mathur, CEO and co-founder of Razorpay, a payments solution provider. “The new version of UPI allows higher transaction limits and has more secure QR-based payments. These added features go on to make UPI a more attractive option. Currently, UPI drives about 8-9% of our transaction volumes and with the merchant friendly features of UPI 2.0, we are looking forward to achieving promising growth here.”

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.