Technological Advancements in Payments: From Cash to Digital through Unified Payments Interface(UPI)

Technological Advancements in Payments: From Cash to Digital through Unified Payments Interface(UPI)

Ankit Dhamija (Amity University Gurgaon, India) and Deepika Dhamija (Amity University Gurgaon, India)
DOI: 10.4018/978-1-5225-1974-4.ch011
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Abstract

Mobile banking in India has witnessed a lot of changes with respect to technological and architectural changes. The continuous rise in the number of mobile banking users is due to this fact that the technological advancements that has restored the faith and boosted the trust of users towards mobile banking and payments. However, in a developing economy like India, where this number of mobile users is expected to grow exponentially, the complexity will also grow as the mobile users expect the mobile banking services to be fast, convenient and most importantly, more secure. There is a scope of improvement with the already existing thing and mobile banking is no different In this direction, the National Payments Corporation of India has initiated a system called Unified Payments Interface (UPI) that further eases the process of money transfer through smart phones and feature phones, thereby bringing this technology within everybody's reach. This chapter further puts insights into the implementation and feasibility aspects of UPI and how it is better than the systems prevailing today.
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Key Terms

  • Mobile Banking: Mobile Banking in lay man terms means the using of a mobile phone to offer banking services. Banks have introduced two different products in mobile banking. One is a personal/retail banking product and the other is a product to promote financial inclusion. As a personal banking product it is offered to every savings/current account holder and provides anytime anywhere banking. The mobile banking initiatives were started by foreign and private banks followed by public sector banks. Mobile banking service is primarily available over SMS (Short Messaging Service) or through GPRS (General Packet Radio Service) or sometimes through USSD (Unstructured Supplementary Service Data). The services available are:

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      Funds transfer (intra and interbank)

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      Balance enquiry services/mini statements

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      Request services (cheque book)

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      Utility bill payments and credit card payments

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      Demat account services

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      Mobile top up

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      Merchant payment, life insurance premium

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      Stop payment instructions

  • RTGS: The acronym 'RTGS' stands for Real Time Gross Settlement, which can be defined as the continuous (real-time) settlement of funds transfers individually on an order by order basis (without netting). 'Real Time' means the processing of instructions at the time they are received rather than at some later time; 'Gross Settlement' means the settlement of funds transfer instructions occurs individually (on an instruction by instruction basis). Considering that the funds settlement takes place in the books of the Reserve Bank of India, the payments are final and irrevocable.

  • NEFT: NEFT stands for National Electronic Funds Transfer and is a payment system which facilitates one-to-one funds transfer.

  • IMPS: Immediate Payment Service (IMPS) is an instant interbank electronic fund transfer service through mobile phones. It is also being extended through other channels such as ATM, Internet Banking, etc.

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