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India’s mobile payments interface to include pre-authorized payments, biometrics


National Payments Corporation of India (NPCI) Ltd. plans to launch an update to its Unified Payments Interface (UPI) system later this year.

NPCI launched UPI in April 2016 with the aim of becoming a universal platform that would allow consumers to make payments using their mobile phone, without the need for downloading an app to send or receive money, thereby eliminating the need for e-wallets. The payments firm notes that since its introduction, UPI has experienced a growth rate of 100 times in transaction volumes.

The next version of UPI will include several new specifications, entitled an “electronic mandate”, which will provide consumers the capacity to make pre-authorize transactions, along with receiving installment payments.

“E-mandate shall be a part of UPI 2.0 once it is approved by the Reserve Bank of India, essentially to provide a decentralized e-mandate mechanism,” Dilip Asbe, NPCI’s Chief Operating officer told the Economic Times of India. “We envisage the use of this in the mobility sector in a big way.”

Asbe said that the e-mandate under UPI 2.0 will allow consumers to “add, update or delete” pre-authorized payments whenever they desire. Pre-authorized payments are automatic payments withdrawn from a bank account on a monthly basis. The new UPI update is also expected to benefit startup e-payment and loan providers, since industry analysts note that current modes for payment, which includes India’s electronic clearing service (ECS) and the national automated clearing house (NACH), often have high failure rates and can take several days for payment processing.

Asbe, however, told the Economic Times that that the new e-mandate, which has already obtained approval from the Reserve Bank of India, is a better solution for lending companies since it is irrevocable without corporate consent.

According to the Economic Times, biometric payments are also expected to be part of the new specifications. Its introduction will allow customers to use virtual payment addresses issued by a UPI-live bank to make transactions vis-a-vis Aadhaar-enabled payment systems.

The UPI payment solution currently enables Indian consumers to initiate a payment request from a smartphone. The system utilizes virtual addresses as payment identifiers for sending and receiving money and works with “one click, two-factor” authentication. The system also provides an option for scheduling push and pull transactions, for various purposes like sharing bills among peers. Further, the system runs on an immediate payment service (IMPS) platform, allowing the service “everywhere and anytime” availability.

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