The future of Payments – UPI 2.0

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 In the previous blog, we discussed different payment mode online and offline. For example, IMPS, RTGS ,NEFT,UPI, NACH, and their features. In this blog, let’s discuss a tad bit more about the online modes prevalent in the marketplace these days.

Credit and debit cards have been the most prominent mode of payment in digital payments. But there are scenarios where the card gets expired or the payment is not processed through cards due to authentication of cards, 3D security,OTP not validated etc. People look out for alternative options and look forward to a seamless experience. Net banking is another easier method for them.  Customers can easily enable Net Banking and Phone Banking feature and take advantage of this. The account gets debited directly without involving card details. Introduction of Wallet became a huge success. Wallet can be either open or closed. Open wallet can be used for multipurpose and is not app-specific while closed wallet can be used only within app scope and money is not transferred to bank account. Wallet is like a mini pig bank for a customer. He can use this wallet as per requirement.

And then came UPI which stands for Unified payment Interface. Customer have to create a Virtual Payment Address and link his mobile number with the app. This mobile Number should be linked to bank account.Unified Payments Interface is an instant real-time payment system developed by NPCI facilitating inter-bank transactions.BHIM, Google Pay, Phone Pay and Multiple bank apps utilize UPI feature. NPCI launched UPI 2.0 recently

Feature and Benefits of UPI 2.0

UPI 2.0 from NPCI has multiple features and Benefits. Let us discuss one by one.

1)Overdraft Account: Customers can now link their overdraft account. This facility was not available till now. It can be now be anticipated that with OD accounts linked to UPI,  we might see even credit card transactions moving to UPI.

2)One Time Mandate: In this feature, the customer can authorize a  transaction, while an account can be debited later.  This can potentially help to digitize Cash on Delivery transactions.

3)Signed Intent and QR code: Signed intent and signed QR will ensure that transactions are more secure.With Signed QR issues related to tampering of QR can also be handled.

4) Invoice in the box: This functionality is only available for the invoices of verified merchants. Before making any transaction, the customer can cross-check for the details.

UPI 2.0 has certainly widened the scope of payments and expanded the potential of UPI to a plethora of new use cases in the financial sector.

We will understand about E-Mandate in the next blog.

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About Noopur Arora

Presently working in Product Management Domain at Policy Bazaar. Responsible for management and integration of Payment Gateway Products. Enabling advanced solutions for seamless transactions through the gateway and an enriching customer experience with multiple payment modes. Prior to this, Worked with PTC Softwares, IBM India with an overall experience of 2.5 years in Product Management, Analysis, Development.

18 thoughts on “The future of Payments – UPI 2.0

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