Banking with UPI 2.0 – Here are key features and details

The long-awaited upgraded version of the unified payments interface (UPI) is here. The National Payments Corporation of India (NPCI) launched the second version of UPI — the UPI 2.0 on August 16. To start with, 11 banks have partnered to offer the second version.

BHIM UPI 2.0, operated by the National Payments Corporation of India, has State Bank of India, HDFC Bank, Axis Bank, ICICI Bank, IDBI Bank, RBL Bank, YES Bank, Kotak Mahindra Bank, IndusInd Bank, Federal Bank and HSBC as its members. Here are four additional services UPI 2.0 will provide:

UPI 2.0 can serve as a great tool for financial institutions, especially in collection of small ticket loans. Banks can run a cyclic process to generate collect request. The monthly EMI statement can be auto-generated and sent to the customer, along with such collect requests. The customer can view the details in request and authorise it for instant repayment of EMIs.

Althoughq UPI 2.0 provides many features that will make customer payments convenient and have better security while transacting, there is a scope for introduction of new features for better adoption. A few of potential new features are:

1. Linking of overdraft account: In addition to current and savings accounts, customers can link their overdraft account to UPI. Customers will be able to transact instantly and all benefits associated with overdraft account shall be made available to the users. UPI 2.0 will serve as an additional digital channel to access the overdraft account.

2. One-time mandate: UPI mandate could be used in a scenario where money is to be transferred later by providing commitment at present. UPI 2.0 mandates are created with one-time block functionality for transactions. Customers can pre-authorise a transaction and pay at a later date. It works seamlessly for merchants as well as for individual users. Mandates can be created and executed instantly. On the date of actual purchase, the amount will be deducted and received by the merchant/individual user.

3. Invoice in the inbox: According to NPCI, this feature is designed for customers to check the invoice sent by merchant prior to making payment. It will help customers to view and verify the credentials and check whether it has come from the right merchant or not. Customers can pay after verifying the amount and other important details mentioned in the invoice.

4. Signed intent and QR: This feature is designed for customers to check the authenticity of merchants while scanning QR or quick response code. It notifies the user with information to ascertain whether the merchant is a verified UPI merchant or not. This provides an additional security. Customers will be informed in case the receiver is not secured by way of notifications, said NPCI.

At the launch in Mumbai, Nandan Nilekani, Advisor – Innovation, NPCI, highlighted that UPI 2.0 has laid down the rails for innovative payment solutions to be provided by banks, and since the systems were standardised and based on open source, they were efficient as well.

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