19th September 2021
Let me show how widespread UPI is.👇🏾
UPI: literally the boss
UPI or Unified Payments Interface is way to digitally transact money between two (different) bank accounts. It was started by NPCI or National Payments Corporation of India in 2016, and has been a game changer since.
NPCI is an umbrella organisation for retail payments setup by the RBI (2008) to grow the digital payment ecosystem of India. Retail payments are end to end payments taking place between consumers, businesses, or government - B2B, B2C, C2C, C2G, etc.
Since then it has launched a multiverse of products like IMPS (Immediate Payment System), UPI, BharatQR, NACH, etc.
NPCI handles approximately 60% of the total online transactions. That's too much power dependency on a single organisation. Imagine NPCI going down for a couple of mins?!
Hence, RBI recently formed NUEs or New Umbrella Entities. It is a collection of various (for profit) companies like Razorpay, Zeta, Pine Labs, Paytm, etc, expected to build better infrastructure or products than NPCI.
What is NPCI
Transferring funds has always been an indispensable part of our lives. It started from cash, cheques and DDs and then we went online with NEFT, IMPS, etc.
'BHIM' was an app launched by NPCI to show how UPI works. Post that, Fintechs and banks started innovating over the usage of UPI. And this was just UPI 1.0! We will discuss all nitty gritty including the technical details of UPI in following 3-4 essays.