Context:
Recently, the President of Maldives introduced India’s Unified Payments Interface (UPI) to boost the Maldivian economy substantially.
More on the News
- Maldives President established a consortium to introduce UPI in the country and appointed TradeNet Maldives Corporation Limited as its leading agency.
- This move is expected to boost financial inclusion, improve efficiency in financial transactions, and enhance digital infrastructure.
- The agreement to introduce UPI in the Maldives was signed during the visit of India’s External Affairs Minister in August of this year.
Unified Payments Interface (UPI)
- UPI was developed by the National Payments Corporation of India (NPCI) in 2016 with 21 member banks.
- It empowers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, real-time payment solutions, seamless fund routing & merchant payments into one hood.
- Payments can be made using a UPI ID, UPI Number, Account number, and an Indian Financial System Code (IFSC).
- Payment security is as per applicable RBI guidelines using a 1-click 2-factor authentication where the second factor of authentication is the UPI PIN.
- UPI is also available through the Unstructured Supplementary Services Data (USSD) channel to enable UPI members to cater to users of feature phones.
- Countries that accept UPI: Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka and UAE.
- UPI Lite: It is a new customer-friendly pre-approved payment solution that utilises existing protocols to enable low-value transactions (below 200 Rs.) without placing transaction traffic loads on core banking systems in real-time.
- RuPay Card: It is a first-of-its-kind global card payment network that was developed by NPCI in India and enabled by UPI for wide acceptance at shops, ATMs, and online.
The Bharat Interface for Money (BHIM) app: It is a UPI enabled app that lets customers make simple payment transactions quickly and easily.
- Customers can make instant bank-to-bank payments, pay and collect money using just a mobile number or UPI ID, or scan and pay using a QR code.
Participants in the UPI ecosystem
- NPCI: It is the owner, network operator, service provider, and coordinator of the UPI Network.
- Banks: Banks and payment banks with an RBI-approved mobile banking license and IMPS capability are eligible for UPI.
- Bank Account holders / Customers: Any customer who is on-boarded by a bank with a UPI enabled account and a UPI ID can utilise the services.
- Merchants: Participating merchants are those who are on-boarded by their banks to accept UPI enabled payments from customers.
- Corporates: UPI also provides the ability for large technology companies, 3rd party processors, and aggregators to connect to banks and provide extensive services to end consumers.
Significance of UPI
- Economic Growth: The introduction of UPI has helped the digital payments landscape to evolve promoting growth and innovation in the industry.
- Digital Economy: UPI is a cornerstone of India’s Shift towards promoting a cashless economy, promoting digital literacy and online transactions.
- Cross-Border Payment Potential: UPI opens avenues for international transactions and boosting global connectivity.