Prelims: Economy – Banking (UPI), Digital Payments System
Mains: General Studies III – Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Why in News
Prime Minister along with President of Sri Lanka and Prime Minister of Mauritius jointly inaugurated the Unified Payments Interface (UPI) services in Sri Lanka and Mauritius.
📌 FYI On Prelims:
- List of countries that officially support UPI payment:
- Sri Lanka
- Mauritius
- France
- UAE
- Singapore
- Bhutan
- Nepal
- Bhutan was one of the first countries to adopt UPI payments outside India back in 2021Also Bhutan is also one of the first countries to adopt and issue RuPay bank cards.
- France is one of the first countries in the Europian region to access UPI payments.
- Srilanka and Mauritius are the latest islands to adopt India’s UPI payment system.
About
UPI (Unified Payment Interface)
- UPI is a mobile-first payment system developed in India by the National Payments Corporation of India (NPCI) in 2016.
- Unlike most digital payment systems, the amount gets directly debited to the linked bank account.
- can be used on BHIM, a first-party app. It can also be accessed via third-party platforms such as Google Pay, Amazon Pay, PhonePe, BharatPe etc.
- No charge is involved in UPI payment.
- UPI Lite – does not require a PIN or internet to make transactions.
- Use Outside India – YES, one needs to enable international payments on the respective apps.
Key Features:
- Single-Window System: UPI is a single window mobile payment system that eliminates the need to enter bank details or other sensitive information each time a customer initiates a transaction.
- Real-Time Payment: UPI is a real-time payment system designed to enable peer to-peer inter-bank transfers through a single two-click factor authentication process.
- Transaction Types: UPI facilitates both push (pay) and pull (receive) transactions. It even works for over the-counter or barcode payments, as well as for multiple recurring payments such as utility bills, school fees, and other subscriptions.
- Multiple Bank Accounts: You can link multiple bank accounts to the UPI platform, making it easier to manage your finances.
- Enhanced Security: UPI is a secure platform regulated by the Reserve Bank of India (RBI), ensuring the safety of your transactions.
National Payments Corporation of India (NPCI)
- It is retail payments and settlement systems in India.
- Initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA)
- It is under the provisions of the Payment and Settlement Systems Act, 2007.
- Incorporated as a “Not for Profit” Company under the provisions of Section 25 of Companies Act 1956 , currently Section 8 of Companies Act 2013.
Source: IE
UPSC CSE Corner
Prelims: PYQ’s/Related Questions
With reference to digital payments, consider the following statements: (2018)
- BHIM app allows the user to transfer money to anyone with a UPI-enabled bank account.
- While a chip-pin debit card has four factors of authentication, BHIM app has only two factors of authentication.
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: a. 1 only
Explaination :
- Bharat Interface for Money (BHIM) is a payment app that lets you quick transactions using Unified Payments Interface (UPI). You can make direct bank payments to anyone on UPI using their UPI ID or scanning their QR with the BHIM app.
- Statement 2 is not correct: there are three levels of authentication that are required in this app. One is the device ID and mobile number, then the bank account which you are linking to this app, and the finally the UPI Pin which is needed to complete the transaction. There are three factors of authentication versus a normal net banking app or a chip pin debit card which will only have two factors of authentication
