Since the last few decades, the world at large is taking steps towards becoming a cashless economy. A recent introduction which is anticipated to cause a big leap towards a cashless economy future is UPI or Unified Payment Interface. Since its launch in the beginning of 2016, there has been a lot of discussion and interpretation as to what it will bring for the future of payment gateways.
Simply speaking, UPI is a newly introduced payment method which will allow your smart phone to act as a virtual debit card. This will facilitate the transfer of money instantly, using nothing but your smart phone. Discussed below is the importance, benefits, and affects that UPI on online payments as a whole.
What is UPI?
When UPI is fully utilized in the real world, the way we think of money and its virtual transfer will change completely. UPI can be thought of as an identification element or an email ID for your money. This unique ID will be what your bank uses to carry out transfers and make payments using Immediate Payment Service or IMPS.
How Does UPI Work?
In order to understand the working of UPI in the real word, first think about how virtual money transfers are made today. If you want to make an online payment, an endless list of details has to be entered such as the bank name, account number, IFSC code etc. This can be a tedious job standing in way of every online payment. UPI seeks to get rid of this procedure.
With the use of UPI, the interface will allow the transferring of money by using just the Adhaar Unique Identity Number, virtual payment address or mobile cell number without having to reach for the bank details every time.
How Will It Affect Payment Gateways?
There are several payment gateways in operation today. One of the repeatedly asked questions since the introduction of UPI is what will happen to these gateways when the former is used in full force. When UPI becomes the new method to pay virtually, will it cause the decease of payment gateways in use today?
The answers to this question has heavily weighted in on “yes”. Payment gateways offer detailed information and offer customization at almost all levels. However, as UPI matures in new security elements will be added to its interface. Hence, it is all set to replace payment gateways in use today and become the mode of virtual payment of the future.