What’s the news?
NPCI(National Payment Corporation of India) has released a news about a new payment system for the UPI users. But not to be a panic situation for a customer side but it could be a panic situation for the merchant side. The corporation has said that the merchant will be charged 1.1% for any payment of Rs. 2000 or above.
Credit: Google
Let’s go in details:
Experience the ease of managing all your daily financial activities in one centralized location, freeing yourself from the burden of inundated savings account statements and mitigating your exposure to potential fraudulent activity and scams.
Effective April 1, 2023, consumers will be able to pay utilizing two methods with a UPI QR code at a merchant outlet. The first option is the continuation of direct payment from their bank account, while the second option is via a pre-paid mobile wallet such as Paytm or MobiKwik. The National Payments Corporation of India (NPCI) has sanctioned Prepaid Payment Instruments (PPI), such as mobile wallets, to be incorporated into the interoperable UPI ecosystem.
Credit: Google
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Merchants conducting wallet transactions via UPI will be charged a 1.1 percent interchange fee on P2M transactions above Rs 2,000, while customers will not be charged. It is important to note that bank-to-bank account transactions on UPI will remain entirely free.
What advantages does using a prepaid wallet have over making direct payments from your bank account through the UPI QR code? One significant benefit is that our daily lives involve many small transactions, which can clutter our bank statements.
With a prepaid wallet, you can enjoy the convenience of keeping all your routine transactions in one place, preventing your savings account from getting overwhelmed.
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It is noteworthy that a wallet can be funded through various payment modes, including credit cards or bank accounts through UPI. This offers the convenience of utilizing a credit card (with applicable fees) as an alternative to relying solely on a bank account in the event of a shortage of funds while making purchases at a merchant outlet.
Credit: Google
The question also arises that will the merchant will be agreeing on these or not, so to debrief these question, Upasana Taku, Chairperson, Cofounder & COO – MobiKwik said “These new transactions will be incremental for the merchant. Now he’s getting access to other payment methods which people can use via wallet to pay him and I think that will really help in case of smaller cities and towns and villages of India, where people are travelling and they don’t have cash. And they want to use other payment methods and they are stuck. So now they have access to other things,”
Historically, the standard method for conducting UPI transactions has been to connect one’s bank account on a UPI-enabled application to facilitate payments.
This method constitutes the overwhelming majority, accounting for over 99.9% of total UPI transactions. However, according to Taku, the wallet business within the UPI ecosystem is poised for growth, signaling a shift in transaction trends.
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UPI the lifeline of modern digital India
On April 11, 2016, the esteemed Governor of RBI, Dr. Raghuram G. Rajan, initiated the pilot program in Mumbai. Subsequently, beginning from August 25, 2016, banks commenced depositing their UPI-enabled applications on the Google Play store. Presently, in May 2021, the platform boasts a user base of over 100 million active users monthly in India.
Credit: Google
UPI was launched even before the launch of the 4G. Only millennials and some upper class educated peoples were using it not knowing the future of it, benefits, or risks.
Slowly and steadily when smartphone market expanded internet becomes cheaper and landing of different players in this market just created a base of trust and security within the country’s people. Even frauds doesn’t missed these market but still milliona of people are still using it.
Now they know everything about UPI and now these are not limited to specific sets of people, it can be used by anyone and one even does not need a smartphone to make a transaction using UPI.
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