It comes as no real surprise that UPI has played an important role in increasing the use of digital payments in India. And the recent developments in digital payment systems put forth a need to develop and simplify the interface. UPI 2.0 is an improved version of UPI that aims to provide a simple and easy payment process. Read this blog to learn more about UPI 2.0.
In this rapidly growing digital world, the importance of digital payments cannot be underestimated. The number of people using digital payment methods has reached an all-time high during the pandemic. But even before that, digital payments and online shopping have been significant in many economies around the world.
The number of payment options has increased for both online and offline payments due to the growth of digital payments. This enables customers to make fast and secure payments without much hassle. Merchants have also benefitted from digital payments because they can sell their products to customers in a different locality or even a different country.
What is UPI and its benefits:
The Unified Payments Interface (UPI) is a system that integrates various bank accounts, promotes smooth fund routing, and merchant payments into a single mobile application. It lets you make payments without needing an account number or other bank details. It instantly credits funds to the receiver on a real-time basis. Additionally, it supports “Peer to Peer” collect requests that may be planned and paid for according to need and convenience.
Benefits of UPI:
- Instant transfer of funds through Immediate Payment Service (IMPS).
- Allows fund transfer anytime (24/7) and anywhere, even on holidays.
- Access to several bank accounts through a single mobile application.
- Provides a secure virtual ID for payments. Each bank provides its own UPI ID.
- Allows you to report any issues through the mobile application directly.
What is UPI 2.0?
UPI stands for “Unified Payments Interface.” UPI 2.0, which was launched in August 2018, is an improved version of the payment platform UPI. It was launched by the NPCI (National Payments Corporation of India) to improve customer service and let them experience a simple, secure, and seamless payment service at the next level. Below are some of the key features of UPI 2.0.
Features of UPI 2.0:
- Link your over-draft account on UPI:
With UPI, customers were only able to link their current and savings accounts. But with UPI 2.0, customers can now link their over-draft accounts as well. UPI 2.0 will be an additional digital linking channel to access the overdraft accounts. This will enable customers to conduct transactions easily and receive all the benefits that come with an overdraft account. The merchants will be able to accept payments using their overdraft accounts.
- UPI One-Time Mandate:
With this feature, customers would be able to make a purchase today and pay at a later date. It is almost similar to scheduled payments, where the customer makes a commitment with the merchant to pay the amount later. While many other online banking apps have this feature, UPI 2.0’s mandate allows you to allot a date for the transaction. The funds will be debited from the customer’s account when the mandate is executed. This mandate feature can be executed only once.
- Check invoice before payments:
Before UPI 2.0 was launched, customers could only check the invoice of their payments after making the transactions. But now, UPI 2.0 allows you to check and verify the transaction details before making a payment. This feature lets customers verify the transaction’s total amount and other details. Only the invoices of verified merchants can make use of this feature.
- Secure QR payments:
This feature lets customers check the authenticity of the merchant account when they scan a QR code to make payments. A certificate will be issued to the QR-core on UPI 2.0, ensuring that the funds have been moved to the right account. Customers will receive notifications if the merchant is a verified account or not. This feature avoids the issue of others tampering with their QR and allows a safe and quick transaction.
Builds trust between customers and merchants:
Enhancing trust between customers and merchants is one of the key asks regarding digital payments. By providing more information on the transaction process, UPI 2.0 aims to alleviate these worries. Before UPI 2.0, the transactions were initiated by customers and focused on P2P (person-to-person) transfers. With UPI 2.0, merchants are able to send payment invoices and money collection requests to customers. This boosts P2P (person-to-person) and P2M (person-to-merchant) transactions.
How UPI 2.0 benefits used cases:
UPI will now be able to digitise the entire ecosystem surrounding the primary payment feature with the introduction of its second phase, UPI 2.0. Financial institutions (FIs) may consider using the features of the improved version of UPI 2.0 for a variety of P2M (person-to-merchant) transactions across creative use cases. Here are some of the industry sectors that can use UPI 2.0 features for better services.
Travel: Businesses can provide one-time mandate feature to customers for booking tickets, hotels, and cabs for future travel.
Healthcare: While sending collect requests, hospitals can share pathology reports and other observations to provide more information to patients.
Subscription: Businesses can use one-time mandate feature by pulling in collect requests for DTH and other media subscriptions.
NBFCs and MFIs: The collection cost can be reduced by providing incentives or rewards for generating mandates for UPI payments.
Financial institutions: FIs are able to analyse data gathered from UPI transaction history and use overdraft facilities for credit profile generation and offer credit facilities.
Micro merchants: Using signed intent or verified QR codes can boost QR-based payment acceptance in small stores and businesses.
NTT DATA Payment Services:
NTT DATA is one of the top online payment gateway service providers that work across 50+ countries, including Japan, the USA, China, Canada, and South Korea. It provides services to more than 6 million merchants. They are integrated with over 50 banks and have over 100 payment options. Some of the services offered by NTT DATA Payments are
- Online Payment Gateway
- POS Machines
- QR Code
- Mobile Application
NTT DATA offers customised payment solutions for merchants from different fields of work, including education, travel and tourism, healthcare, gaming, retail, etc. it helps businesses easily create payment reports and track and manage all customer payment records.
Online payments have been developing rapidly in recent years, and UPI is at the forefront. Multiple business sectors have integrated their banking systems with UPI 2.0 to give their customers an easy and secure payment experience. UPI 2.0 has great potential in the developing digital payments ecosystem and is working to make the payment experience smooth for both customers and merchants.