Changes in UPI

In Context

• RBI governor recently announced an additional function for Unified Payments Interface (UPI) platforms.

More about the new changes to UPI

• The current function:
  • The UPI currently includes functionality to undertake recurring payments and single-block payments. 
• Changes:
  • It is now being enhanced to allow customers to block funds in their accounts for multiple payments of specific nature.
• Significance:
  • This is expected to improve the ease of making payments for online shopping and investments in securities. 
  • With the new feature, the merchant can make multiple debits up to a permitted amount.
  • The feature will also be helpful in the purchase of government securities using the RBI’s retail direct scheme. 
• Implementation:
  • Separate instructions will be issued to the National Payments Corporation of India (NPCI) to implement the enhancement.
  • RBI governor also announced an expansion in the scope of Bharat Bill Payment System (BBPS) to include all payments and collections.

About Unified Payments Interface (UPI)

• About:
  • Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India (NPCI). 
  • The interface facilitates inter-bank peer-to-peer (P2P) and person-to-merchant (P2M) transactions.
• Transfer of funds:
  • It is used on mobile devices to instantly transfer funds between two bank accounts. The mobile number on the device is required to be registered with the bank. 
    • The UPI ID of the recipient can be used to transfer money. 
• Function & regulation:

It runs as an open-source application programming interface (API) on top of Immediate Payment Service (IMPS) and is regulated by the Reserve Bank of India (RBI).