Unified Payment Interface (UPI) - 2.0 is here, Read in detail.

UPI - 2.0

After several months of delay, National Payment Corporation of India (NPCI) is likely to launch the upgraded version of the UPI(Unified Payment Interface) 2.0 payment platform this week. 

The second version of UPI is likely to include new features like doubling of the transaction limit to Rs 2 lakh and buyer-to-merchant payment facility that will promote merchant payments. 

The current UPI only allows for peer-to-peer payments. Launched in August 2016, UPI is a payments system that facilitates instant fund transfer between two bank accounts on a mobile platform.

Here are some key updates you can expect in the UPI 2.0:

• Double transaction limit: The transaction limit is set to double from the earlier version to Rs 2 lakh

• Overdraft account: UPI allows users to link only saving accounts, the upgrade would allow the users (i.e., the merchants) to link overdraft (OD) accounts to UPI, enabling them to continue withdrawing money even if the account doesn't have sufficient funds.

• The merchants can block a certain amount in a customer’s account as security and debit it at a future date without additional authentication.

• The facility will be useful for booking hotel rooms airline tickets, booking cab rides, ecommerce deliveries, buying stocks during IPOs and other transactions.

• No biometric Aadhaar payment feature: Proposal to introduce Aadhaar-based payment service has been withdrawn because of privacy concerns

• E-wallets may be allowed to be part of UPI 2.0. At present only bank accounts can be used for payments.

• Standing instruction feature is also under consideration, however, the Reserve Bank of India has not approved the ‘standing instruction’ features

• Invoicing facility: The new UPI will allow individuals or merchants to send an invoice along with a payment request in the Inbox.

The second phase is coming at a time when UPI transaction are showing record growth, driven by private players like Paytm and Google Tez. 

In the month of June, UPI transactions hit nearly 25 crore, an increase of 30 per cent over 19 crore in May 2018. The value of these transactions grew 22% in June 2018 from Rs 33,288 crore in March 2018.