UPI Platform is Cheap, Secure, Reliable mobile first, inter operable/ open source, instantaneous settlement, both pull and push.
One major disadvantage of pre paid wallets is in a given month they can’t do more then 10,000 worth of transaction with out KYC, while UPI enabled platform bank accounts can do a transfer upto Rs 1 lakh instantaneously.
Since Money sits in your bank account, you are earning your savings bank interest which is upto 4% per annum.
My points in elaborate:
Cheap: Cost of each transaction is going to be less then Rs 0.45, think of all the savings from and to bank accounts.
Virtual address: Now one can use virtual/ disposable accounts to do transactions generated right from your bank app. By this the merchant or the payee willn’t know your details and even if he is hacked you needn’t worry about losing money.
Pull & Push: Amount can be requested from a certain account or paid into some other account.
Instantaneous: The transfer is instant, yet to come across any other system over the world which works for the banks.
Mobile First: Its one of the few systems in the world designed for new mobile age, helping with easy integration across various platforms.
Inter operable: OTP generated on one bank app can be used across another for transaction authentication. Also, multiple level of identifiers can be used ( Bank account, Aadhaar number, virtual identifier, mobile number.., etc) to send or receive money.
Bio-metric integration gives a 2nd factor authentication securing your account like none other in market.
Recurring Payments: Even though, directly not supported, but Payment Support Providers can provide an add on for easy to do recurring payments on top of UPI.
Open APIs: Most importantly i see open APIs are going to be game changer as before one with Cash & Contacts can’t control the ecosystem. Its a level play ground, by which even a small start up can do what a gaint MNC can do.
Hence, i feel UPI platform is going to be a game changer and going to give stiff competition to Mobile Wallets and would be enabler of payments.
Source of the image: mpf.org
Guest Post by Sainath Gupta, AnythingAI