Let's welcome the "New" UPIs
Fintech Edition today!
The other day I bought a band-aid from a local paan wala in Mumbai (yeah, they keep band-aids), and it cost me 4 bucks. I had a 100-rupee note, and (obviously), he declined to give me change.
I asked him what to do, and he immediately was like “Sir Google Pay nahi hai?”
It’s kinda awesome how I can make a digital payment for 4 bucks in less than 5 seconds!
8 years ago, I’d have to let the band-aid go and let my shoe-bite keep pissing me off. But today, “not having change” is not an issue any more! UPI is GOLD.
And NPCI is keeping on adding cherries on the cake.
So today, we’ll talk about 3 new cherries 😋 that NPCI launched a few days back. Let’s look at them one by one:
1. UPI Lite
Have you done that transaction where you swipe your credit card and don’t need to enter your pin? The transaction gets approved straightaway?
Now this feature will be available on UPI too, where you don’t need to enter your UPI pin for small ticket transactions.
(I mean, imagine buying a 4-rupee band-aid and entering your PIN for it..the thought itself is embarassing, although I’ve been there, done that 😂)
Essentially, how this works is that there’s a wallet on the UPI app which you’ll first load with money via UPI. And then whenever you make a transaction of less than Rs. 200, you need not enter your PIN - it’ll straightaway get debited from the wallet. Reduces one friction point, and makes it seamless 😁
Currently, this feature is available only on the BHIM app. I don’t think the others have implemented it yet.
Also, this feature is currently enabled only for merchant payments. You can’t pay your friend via UPI Lite.
2. UPI 123 Pay
This is another great innovation in UPI, where you don’t need a smartphone anymore to make a UPI payment. You can do it with a feature phone too. You just need to call (080) 45163666 from the mobile number that’s registered with your bank, where there will be an IVR asking you to enter the beneficiary’s mobile number, amount, your UPI pin, and an OTP that you would get while during the call.
As soon as this is done, your money gets transferred instantly, without having to use any app.
While this sounds like a great innovation, I’m personally not sure how much it’ll help, since the user segment that is not tech-savvy, may probably not even be financially savvy. But, too early to comment!
3. Credit on UPI
Saving the best one for the end - now you can link your UPI handle with your credit card. This means that you scan a QR code at a merchant outlet, enter your PIN, and instead of your bank account getting debited, your Credit Card will get debited.
Sounds fancy?
Well, here’s the catch.
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Now, coming back..
For starters, Credit on UPI works only with Rupay cards, and that too only with Punjab National Bank, Union Bank and Indian Bank for now. The rest are planning to get onboarded as we speak.
Second, this is currently available only on the BHIM app. Other players like GPay, PhonePe etc have not decided when they want to launch this feature, which means it’s going to take a while to become mainstream.
Lastly, I read somewhere (but can’t be sure, so please take this with a pinch of salt) that the merchant also needs to enable accepting payment via UPI on credit card in their own app. This means both entities need to have this enabled. If this is true, it becomes a bigger problem, because while consumers would be tech-savvy to download BHIM and use it for this feature, merchants won’t be, making it a long wait before this mode of payment becomes common.
I couldn’t try it out as I don’t have an account with any of these banks. If you do, why don’t you try it at a merchant outlet and let me know? It’ll really help - and I’ll post about it in the next newsletter giving you credit 😉
Well, that’s it for today! Like I’d said, today’s edition was on Fintech, since it’s Wednesday. I’ll write about Finance on Sunday!
Why don’t you share this piece with friends and tell them about this new initiative in the Fintech space?
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