Unified Payment Interface: Ushering a New Era in Indian Payment System

Payment SystemThis is a guest column by Ankit Dudhewala, Co-founder of

With the increasing use of smartphones nationwide, the FY2015 experienced cashless transactions of ₹1 lakh crore through mobile banking. Well, this is no great thing but this has been the fastest growing payment option so far and is expected to increase during the span of next 5 years.

With the varied available options of online transactions, there have also been risks associated with it. To facilitate the online users and make the payment systems more secure, Reserve Bank of India launched a system of Unified Payment Interface last month. This system is set with a vision to provide a payments architecture that will be directly linked to your mobile to achieve the goals of universal electronic payments, cashless transactions and financial inclusion using the latest technology trends.

Let us look at some data before proceeding further with the insights of UPI :


Along with this data, the number of Aadhaar card holders has also been increased in the past few years. For the purpose of payment via UPI, one has to have Aadhaar card.

Entities that will define the implementation of  Unified Payment Interface :

  • Payment System Players

This term collectively defines all RBI regulated entities under payments and settlement act of 2007 which include banks, payment processors, PPIs (Pre-paid Payment Instruments Issuers) and other regulated entities which will be directly or indirectly involved  in the payment.

  • Global Identifier

An identifier is an entity which will be used to make identification possible for the user. This will include Aadhaar number and Mobile number of the user that will be unique.

  • Virtual Payment Address

This entity will be used to depict an identifier that can be uniquely mapped to an individual account. This can be done using a translation service. These virtual address will be used for making and receiving payments. Though Aadhaar number and Mobile number are set to be global identifiers, but Payment System Players can offer any number of virtual  addresses to the customers who would be able to use these addresses for making and receiving payments.

The key takeaways of the Unified Payment System are:

  1. Simple to use

With the implementation of this system, the payments would be made as easy as swiping a phone book entry or doing a call. Anyone with the bank account will be able to send and receive money from their mobile phone with just an identifier. What all they need to do is to either pay to or collect from a payment address and that too with a single click.

  1. Innovative approach

The approach is such that both payee and payer can work without having to change the whole interface. This unified layer will be able to allow application providers to take advantage of various enhancements in mobile devices, provide target payments & provide various user interface features, etc.

  1. Adoption

The solution is able to provide full interoperability across all phones, payment channels and various use cases.  It also provides an option for the smartphone users to send money to those who don’t have mobile applications and vice versa. It will also be able to allow interoperability between multiple identifiers such as Aadhaar Card number, mobile number, etc.

  1. Security factor

This solution will be able to provide end to end strong security along with data protection. It helps the user with the mechanism to pay and collect using true virtual addresses without the need to reveal any bank/account details.

  1. Cost benefits

As the matter of fact, at present there are about 150 million smartphone users in the country and the number is expected to grow in the upcoming years. The mobile phone will be used as authentication device along with virtual payment addresses. The third party authentication schemes such as Aadhaar will be used which will allow both acquiring side and issuing side cost to be driven out.

No doubt, we have succeeded so far in developing and implementing various techniques for the betterment of our country. But with the introduction of Unified Payment Interface, we have entered into ushering a totally new and undefined era which will give Indian Payment System a totally new vision.

Over to you:

How well do you think will this new step by our government going to give a new hedge to the country? Will this payment technology be fruitful for the society and country? Your thoughts are welcome in comments section.

About the Author

Ankit Dudhewala is the Co-Founder at, a business software discovery platform made for Indian companies. He is a marketer by passion and a salesman by heart.

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Disclaimer: This is a guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).

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