National Payment Corporation-promoted UPI is having a ball in India. The fast and simple mobile number-centric payment method has been witnessing unprecedented penetration since its inception 20 months ago. With 91 crore transactions, UPI has till now processed over Rs 1 lakh crore.
Notably, about 90 per cent of UPI-powered transactions is peer to peer with a little usage for merchant payments. But, soon this will change as NPCI is planning to launch UPI 2.0. It promises to ease payment between individuals and businesses.
UPI 2.0 would empower people to set up a mandate for recurring payments such as monthly utility bills, insurance premiums, mutual funds and monthly rents amongst several others, reports Business Standard. Importantly, linking your UPI account for paying EMIs or premium would be a one-time affair.
Such payments would be debited from an individual account on agreed terms and conditions. This essentially weeds out the headache of making payments manually every month for premium and EMIs.
The newer version of UPI will also facilitate international inward settlement. It will fasten and simplify the process of sending money from foreign soil. UPI 2.0 would leverage VPA that essentially allows users to transfer money without entering the account number and IFSC code, amongst others.
For merchants, setting up a UPI-based payment is economical and faster than the point of sales (PoS) terminal.
With the launch of Google Tez and Paytm, UPI ecosystem has recorded hockey stick growth curve in 2017. Currently, WhatsApp UPI is in closed beta stage and is slated to spurt the usages once the feature gets open to public.
So far, the UPI is largely used for peer to peer fund transfer. However, the government has been making efforts to drive its adoption through a slew of initiatives.
Of late, UPI has been eating up the wallet business of companies including Paytm, MobiKwik, and FreeCharge.
With UPI 2.0, NPCI seems to cannibalise digital wallet further. At present, Paytm has a perfect use case with Uber. However, the ride-hailing giant is also expected to launch its own UPI-based payment feature that would eventually add more woes to Paytm wallet business.