UPI 2.0 can turn into a mega citizen-scale pay system

India enters 2019 on the cusp of a digital revolution, mainly due to major influencers. First, we have a regulator defining the landscape by innovation-led policies, fuelling new-age business models and maintaining security and risk management standards to highest levels. Second, we have a government that is focused on moving towards a digital or less-cash economy. Third, we have banks embracing technology to accelerate digital payments, proliferation of financial inclusion and superior customer services. And last, we have fin-tech innovators who are re-imagining solutions for our day-to-day problems and providing superior consumer experience for digital payments.

The Unified Payments Interface (UPI), the most advanced payment system in the world, was launched in 2016, designed on the principles of interoperability, consumer choice and forging partnerships between banks and fintechs, leveraging each other’s strengths. The RBI’s payment system division DPSS, under the governorship of Raghuram Rajan, played a key role in bringing banks together to promote this initiative. Support of the Indian Banks’ Association (IBA) and leading lenders has been a critical factor in its success. In the second half of 2018, the National Payments Corporation of India (NPCI) launched UPI 2.0 with the support of regulatory teams under former RBI governor Urjit Patel and deputy governor B P Kanungo to incorporate path-breaking features.

Several milestones were achieved in domestic payments last year. India’s RuPay Card crossed 500 million and Bharat BillPay on-boarded over 100 billers in its ecosystem. The Aadhaar payments services, too, surpassed 100 million unique customers every month. After demonetisation, the UPI-based ‘Bharat Interface for Money’ (BHIM) app, launched by Prime Minister Narendra Modi, has acted as a catalyst to nudge many third-party providers to launch the UPI app. We are now seeing the results. Sticking to the design principle of “consumer choice”, there are now over 90 BHIM UPI apps provided by banks or thirdparty providers to customers of 130 banks.

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