September 15, 2016

UPI - India lays foundation for a fintech revolution

India is setting a new global standard in fintech. A new instant online payments system, tied to national biometric identity data, launched in recent weeks. Together with an explosion in smartphone usage, this could help the world’s fastest-growing large economy skip traditional financial infrastructure like cash machines, debit cards and point-of-sales machines – speeding up a move to a cashless economy.

The so-called “Unified Payment Interface” is unlike anything available in China or the United States. It enables secure, real-time transfers from one person to another, or to a company. UPI enables individuals and businesses to manage money held across multiple accounts at various banks through a single mobile application – and not one that necessarily belongs to the customer’s own bank. Already 29 big lenders have signed up.

UPI has the power to turn every smartphone into a bank. It enables a user to pay for vegetables at a market stall and settle dues for goods bought online. It can also facilitate domestic remittances, allowing users to both send and receive money from friends and family within the country. The platform caps single transactions at 100,000 rupees – around $1,500 – but the limit on the number of transactions a user can make is up to the bank.


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