In the vibrant landscape of India's digital revolution, the National Payments Corporation of India (NPCI) stands tall as a pioneer, shaping the future of financial transactions. Central to its transformative journey is the Unified Payments Interface (UPI) technology, a game-changer in the realm of peer-to-peer payments. Let's embark on a journey to unravel the intricacies of NPCI, UPI, and the fascinating world of digital payments terminology.
National Payments Corporation of India (NPCI):
A Pillar of Digital India: Established in 2008, NPCI has been instrumental in architecting India's digital payments infrastructure. As a not-for-profit organization, its mandate extends to orchestrating seamless retail payments and settlement systems across the nation.
Driving Financial Inclusion: NPCI's vision transcends boundaries, aiming to empower every Indian with access to secure and efficient payment solutions. Its initiatives, such as UPI and IMPS, have been pivotal in bridging the gap between the banked and unbanked segments of society.
A Catalyst for Innovation: With a focus on fostering innovation, NPCI continually evolves its suite of payment products, driving the adoption of cutting-edge technologies and enhancing customer experiences.
Unified Payments Interface (UPI) Technology:
Empowering Instant Transactions: UPI redefines the payment paradigm by offering real-time, 24/7 fund transfers between bank accounts. Its architecture eliminates the need for cumbersome account details, replacing them with virtual payment addresses (VPAs) that simplify transactions.
The Backbone of Digital India: Launched in 2016, UPI has emerged as the cornerstone of India's digital payment ecosystem. Its versatility extends beyond peer-to-peer transfers to encompass bill payments, merchant transactions, and more, revolutionizing the way Indians transact.
Securing Every Transaction: UPI's robust security framework, comprising two-factor authentication and encryption protocols, ensures the integrity and confidentiality of every transaction. This commitment to security instills trust among users and reinforces the resilience of the digital payment infrastructure.
Delving into UPI Technology:
Technical Architecture: UPI's architecture encompasses a multi-layered ecosystem, comprising UPI apps, the UPI platform, payment service providers (PSPs), payment gateways, and bank servers. This intricate network seamlessly orchestrates transaction processing, ensuring swift and reliable fund transfers.
Transaction Workflow: From initiating a payment request to receiving instant confirmation, UPI's transaction lifecycle exemplifies efficiency and seamlessness. Users experience unparalleled convenience as funds traverse the digital realm in a matter of seconds, transcending geographical barriers.
Terminology Unveiled: Dive into the lexicon of UPI with terms like Virtual Payment Address (VPA), UPI ID, Collect Request, Merchant Payment, Transaction Limits, and Transaction Charges. Understanding these nuances empowers users to navigate the digital payment landscape with confidence and clarity.
Let's discuss some technical terms being used:
- PSP (Payment Service Provider): A PSP is an entity authorized by the National Payments Corporation of India (NPCI) to offer UPI-based payment services to customers. PSPs play a crucial role in facilitating transactions between users, ensuring the smooth operation of the UPI ecosystem.
- PPI (Prepaid Payment Instrument): PPI refers to a payment instrument that facilitates the purchase of goods and services, including financial transactions, against the value stored on such instruments. Examples of PPI include mobile wallets, prepaid cards, and virtual prepaid cards.
- Business Decline (BD): Business Decline refers to transaction declines due to reasons unrelated to technical issues on the bank or NPCI side. These declines may occur due to factors such as entering an invalid PIN, incorrect beneficiary account details, exceeding transaction limits, or exceeding the permitted count of transactions per day. Such declines are termed as Business Decline.
- Technical Decline (TD): Technical Decline occurs when a transaction is declined due to technical reasons, such as unavailability of systems or network issues on the bank or NPCI side. Unlike Business Decline, Technical Decline is attributed to technical issues rather than user-related factors.
- Debit Reversal Success Percentage: Debit Reversal Success Percentage indicates the percentage of total cases where a customer's account may be debited, but their bank is unable to confirm instantly about the status of reversal of such a debit. When reversal or credit is not processed instantly, it is typically handled manually by the bank in accordance with the existing Reserve Bank of India (RBI) guidelines.
- Deemed Approved (Pending Credit Confirmation for UPI remittance transactions): Deemed Approved Percentage indicates the total percentage of cases where credit confirmations are not received online from the beneficiary banks for the credit in UPI remittance transactions. In such cases, if the beneficiary account is not credited online, the transaction would be manually processed by the beneficiary bank as per the extant RBI guidelines.
- Remitter: The Remitter is the account holder who is sending the money through a UPI transaction. They initiate the transfer of funds from their bank account to the beneficiary.
- Beneficiary: The Beneficiary is the account holder who is receiving money through a UPI transaction. They are the intended recipient of the funds transferred by the Remitter.
- Remitter Bank: The Remitter Bank is the bank that holds the account of the Remitter, the individual sending money through a UPI transaction.
- Beneficiary Bank: The Beneficiary Bank is the bank that holds the account of the Beneficiary, the individual receiving money through a UPI transaction.
In essence, NPCI's UPI technology transcends mere transactions, embodying a vision of empowerment, inclusivity, and progress. As India embarks on its journey towards a cashless society, UPI serves as a beacon of innovation, resilience, and possibility, illuminating the path to a digital future.
UPI Payer PSP Performance
| UPI Payer PSP Performance (Mar'24) | |||||
|---|---|---|---|---|---|
| Sr. No. | Payer PSP | Total Volume (In Mn) | Approved % | BD % | TD % |
| 1 | YES BANK LTD | 3895.71 | 93.70% | 6.18% | 0.13% |
| 2 | AXIS BANK LTD. | 3723.05 | 94.37% | 5.48% | 0.15% |
| 3 | ICICI BANK | 2690.47 | 94.21% | 5.65% | 0.14% |
| 4 | PAYTM PAYMENTS BANK | 1321.44 | 91.61% | 8.26% | 0.13% |
| 5 | STATE BANK OF INDIA | 1255.46 | 95.77% | 4.15% | 0.08% |
| 6 | HDFC BANK LTD | 1196.05 | 95.43% | 4.45% | 0.12% |
| 7 | TRI O TECH SOLUTIONS PRIVATE LIMITED | 43.69 | 100.00% | 0.00% | 0.00% |
| 8 | KOTAK MAHINDRA BANK | 39.38 | 100.00% | 0.00% | 0.00% |
| 9 | BHIM | 32.08 | 93.66% | 6.17% | 0.17% |
| 10 | AIRTEL PAYMENTS BANK | 16.43 | 95.22% | 4.72% | 0.06% |
Top 5 Remitter Banks in March 2024
| Sr. No. | UPI Remitter Banks (Mar-2024) | Total Volume (In Mn) | Approved % | BD % | TD% | Total Debit Reversal Count (In Mn) | Debit Reversal Success % |
|---|---|---|---|---|---|---|---|
| 1 | State Bank Of India | 3557.54 | 94.99% | 4.70% | 0.32% | 16.59 | 95.04% |
| 2 | HDFC BANK LTD | 1158.51 | 96.13% | 3.86% | 0.01% | 4.26 | 99.60% |
| 3 | Bank of Baroda | 882.82 | 93.30% | 6.25% | 0.45% | 4.40 | 96.49% |
| 4 | Union Bank of India | 848.59 | 93.47% | 5.14% | 1.40% | 6.51 | 53.92% |
| 5 | Punjab National Bank | 728.08 | 94.22% | 5.54% | 0.23% | 3.49 | 99.11% |
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