Nirmala Sitharaman, the Finance Minister on Saturday announced that Merchant Discount Rate (MDR) charges will be waived off for UPI and RuPay transactions starting from January 1.
Razorpay, a Bengaluru-based payment gateway reported that in October 2019, UPI accounted for 50.49% of transactions on its platform.
What is UPI?
Unified Payments Interface or UPI is an immediate real-time payment system developed by the National Payments Corporation of India (NCPI). It was introduced in April 2016 as a pilot project and is regulated by the Reserve Bank of India (RBI).
Soon after it was launched, banks announced their own UPI apps. It also paved the way for third-party apps such as PhonePe and Google Pay (earlier Google Tez).
Within three weeks of the launch of its UPI app, ICICI bank revealed that its app had crossed 1 lakh downloads. According to another report, Google Pay and PhonePe ruled the roost with 36% market share each, while Paytm has 16% market share. This year, Google Pay crossed 100 million downloads, registering a growth of 50% as compared to last year.
UPI 2.0 announced with enhanced features
Two years after the launch of UPI, the NPCI announced UPI 2.0, a revamped version of UPI with several new features.
The main highlight of UPI 2.0 is that it increased the per transaction cap to ₹2 lakh and the ability to link overdraft accounts. Earlier, users could only link their savings and current accounts to UPI.
UPI 2.0 also has features like one-time mandate that allows users to pre-authorize a transaction, Invoice-in-inbox which allows users to verify the invoice before making a payment and more.
These mandates are useful for buying into IPOs (Initial Public Offering), make recurring bill payments and more.
How does UPI work?
UPI is simple, free and it works 24x7.
Users can send money by scanning QR codes or entering the
How to pay using UPI?
UPI is also accepted as a payment mode on several popular platforms like Flipkart, Amazon, Paytm and more. To make a payment, all you have to do is follow these simple steps:
- In the checkout section, select UPI as the mode of payment.
- Now, select the UPI app or enter your UPI ID, and a collect request will be sent to your phone.
- Tap on the collect request – this will open the UPI app which you had selected.
- Click on Accept and enter your UPI PIN.
See also:
No MDR charges applicable on payment via RuPay, UPI from Jan 1: FM
Google wants US to learn from India's UPI example, writes letter to Federal Reserve to build FedNow
Not many new players will enter UPI space: Report