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Nepal will be the first foreign country to adopt India’s Unified payments interface (UPI) system:

GS Paper 3:

Topics Covered: Developments in Science and Technology.

 

Context:

The National Payments Corporation of India (NPCI) has announced that the neighboring country of Nepal will be the first foreign country to adopt India’s UPI system.

 

What is UPI?

Unified Payments Interface (UPI) is an instant real-time payment system, allowing users to transfer money on a real-time basis, across multiple bank accounts without revealing details of one’s bank account to the other party.

  • UPI is currently the biggest among the National Payments Corporation of India (NPCI) operated systems including National Automated Clearing House (NACH), Immediate Payment Service (IMPS), Aadhaar enabled Payment System (AePS), Bharat Bill Payment System (BBPS), RuPay etc.
  • The top UPI apps include PhonePe, Paytm, Google Pay, Amazon Pay and BHIM, the latter being the Government offering.
  • NPCI launched UPI with 21 member banks in 2016.

 

What is BHIM?

Bharat Interface for Money (BHIM) is India’s digital payment application (app) that works through UPI, a system that powers multiple bank accounts into a single mobile application.

 

The BHIM app has three levels of authentication:

  1. For one, the app binds with a device’s ID and mobile number.
  2. Second a user needs to sync whichever bank account (UPI or non-UPI enabled) in order to the conduct transaction.
  3. Third, when a user sets up the app they are asked to create a pin which is needed to log into the app. The UPI pin, which a user creates with their bank account is needed to go through with the transaction.

 

Insta Curious:

National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India, is an initiative of Reserve Bank of India (RBI) and Indian Banks’ Association (IBA) under the provisions of the Payment and Settlement Systems Act, 2007. Do you know about the services it provides?

Reference

 

InstaLinks:

Prelims Link:

  1. Who controls ATMs in the country?
  2. What is UPI?
  3. What is National Automated Clearing House (NACH)?
  4. What is National Financial Switch?
  5. Three levels of authentication in BHIM.

Sources: the Hindu.