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NPCI extends market cap deadline for UPI apps by two years to end of 2026.
The National Payments Corporation of India (NPCL) extended further the deadline for implementing the transaction volume cap on Unified Payments Interface apps by two years- until December 31, 2026.
About:
Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood.
- Unified Payments Interface (UPI):
- UPI is an advance version of IMPS i.e, (Immediate Payment Service) .
- IMPS is round–the-clock funds transfer service for making the cashless payments faster, easier and smoother.
- It is a system which powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing and merchant payments into one hood.
- Among the National Payments Corporation of India (NPCL) is currently the biggest operated system including National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay etc.
- The top UPI apps today includes the following payment systems:
- PhonePe
- Paytm
- Google Pay
- Amazon Pay
- BHIM
- As part of an agreement, India’s UPI will be linked to Singapore’s PayNow.
- NPCI launched UPI with 21 member banks in 2016.
Achievements:
- Phenomenal growth during the pandemic :
- The digital transactions which are done through UPI have recorded phenomenal growth during the pandemic year 2020-21 and several countries have evinced interest to learn from Indian experience so that they could also replicate the model.
- Crossed USD100 billion
- Value of transactions made using the UPI crossed USD100 billion in a month for the first time in October, 2021 according to data from NPCI, further sticking its position as India’s most popular digital payments system.
- Compounded Annual Growth Rate
- India’s digital payments industry is likely to grow from Rs. 2,153 trillion at 27% Compounded Annual Growth Rate (CAGR) to Rs. 7,092 trillion by 2025.
- The growth is likely to come on the back of strong use cases of merchant payments, government policies including: Jan Dhan Yojna , Personal Data Protection Bill along with the growth of MSMEs, growth of millennials and high smartphone penetration.
Challenges:
- Threat of cybercrime:
- The threat of cybercrime in the global banking and financial services industry has increased amid the coronavirus pandemic.
- E.g.- Malicious Software Cerberus
- The threat of cybercrime in the global banking and financial services industry has increased amid the coronavirus pandemic.
- Emerging challenges:
- Fraudulent claims
- Chargebacks
- Fake buyer accounts
- Promotion/coupon abuse
- Account takeover
- Identity theft
- Card detail theft
- Triangulation frauds
National Payments Corporation of India
NPCI, an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007. It is a “Not for Profit” Company under the provisions of Section 25 of Companies Act (now Section 8 of Companies Act 2013), with an intention to provide infrastructure to the entire Banking system in India for physical as well as electronic payment and settlement systems.
Way Forward:
- A properly designed Public-Private Partnership Policy may provide a 21st century engine to harness the power of market players for greater digital infrastructure, access, and literacy for the Indian population.
- In a vibrant Indian democracy, a public policy-driven digital empowerment of the Indian electorate can help ensure responsible digital conduct in the interest of consumers and the larger public interest.
