According to the ‘India Digital Payments Report’ for the third quarter of 2022, UPI clocked over 19.65 billion transactions worth ₹32.5 trillion.
What is UPI?:
- UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank).
- It does so by merging several banking features, seamless fund routing & merchant payments into one hood.
- The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.
- It was launched in 2016, by the National Payments Corporation of India (NPCI).
Working of UPI:
- In UPI, a user just needs to download the UPI app, register details, and create a virtual payment address (VPA). The user needs to link the VPA to their bank account.
- This VPA becomes the users' financial address and the user need not remember the details like beneficiary account number, IFSC codes, or net banking user id and password for sending or receiving money.
The UPI interface allows multiple bank accounts to be added into a single mobile application.
What is National Payments Corporation of India (NPCI)?
- National Payments Corporation of India (NPCI) is an umbrella organisation for operating retail payments and settlement systems in India.
- It 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, for creating a robust Payment & Settlement Infrastructure in India.
- It has been incorporated as a Not for Profit Company with an intention to provide infrastructure to the entire banking system in India for physical as well as electronic payment and settlement systems.
- The Company is focused on bringing innovations in the retail payment systems through the use of technology for achieving greater efficiency in operations and widening the reach of payment.
Q1) What is IBA?
The Indian Banks' Association (IBA) is an association of Indian banks and financial institutions, formed on September 26, 1946 with 22 members to work proactively for the growth of a healthy, Professional and forward looking, banking and financial services industry.
Source: The Hindu