R3″ parting gift: Cashless economy idea becomes a reality

Cashless economy, Plastic money, virtual currency

The idea of a cashless economy has become a reality. National Payments Corporation of India’s Unified Payments Interface is ready and customers of 21 banks will in a day or two be able to send and collect money via a smartphone. A brainchild of RBI Governor Raghuram Rajan (R3), the UPI, which works on single click two-factor authentication, will allow a customer to have multiple virtual addresses for accounts in various banks.

The UPI app of 19 banks will be available on Google Play Store in two-three working days for download. The details of the service will be available on the websites of the 21 banks. The new payments interface will also provide an option for scheduling push and pull transactions, such as sharing bills among peers.

One can use the UPI app instead of paying cash on receiving a product from an online shopping website and also for making miscellaneous payments such as utility bills, school fees, and over-the-counter/barcode-based payments. To ensure the privacy of customer data, NPCI said, in a statement, that there is no account number mapper anywhere other than the customer’s own bank. This means customers can freely share their financial address. A customer can also use the mobile number as the username instead of a virtual address like “1234567890@xyz”.

AP Hota, MD and CEO, NPCI, said: “This is a success of enormous significance. Real-time sending and receiving money through a mobile application at such a scale on interoperable basis had not been attempted anywhere else in the world.”

After assessing the pilot run, the RBI had accorded final approval for the public launch of the product. NPCI had decided that only banks with a thousand pilot customers, 5,000 transactions and success rate of around 80 percent would be permitted to go live. Such a threshold criteria helped banks to refine their systems and procedures.

Arun Tiwari, Chairman and Managing Director, Union Bank of India, said: “…Union Bank in association with NPCI is one of the first public sector banks to launch this (UPI) product. This mobile app can be used by both our bank’s customers and non-customers.”

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