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The second phase of the successful Unified Payments Interface (UPI 2.0) is set to launch close to the second week of August but without a key feature that many were looking forward to, two people familiar with the matter confirmed.
Banks and payment firms have been awaiting the updated version of UPI to push digital payments further.
This feature is likely to be absent from the second version of the now popular payment interface.
The recurring payments service, which was expected to be part of the second phase was not included due to security concerns and because the National Payments Corporation of India (NPCI), which developed UPI, was not sure how the customers would accept it, said one of the two people quoted above.
It was expected that the same mandate could be introduced into UPI-based apps. However, this will not happen immediately, the person quoted above said.
NPCI declined to comment on the planned launch of UPI 2.0
While the withdrawal of the recurring payment service is a disappointment for many, UPI 2.0 will bring in other features.
The new version will offer the option of a ‘one-time mandate’. This would allow the customer to block a certain amount of funds from their bank account to pay for a service, prior to availing it, said the person quoted above. This would help in ensuring that the customer has adequate funds in their bank accounts prior to availing the service.
Including the one-time mandate service, UPI 2.0 will introduce five new services for customers.
UPI has been widely seen as a success, with both transaction volumes and values rising steadily.
The first phase of the platform was launched in April 2016 and got a fillip after the government decided to withdraw Rs 500 and Rs 1,000 currency notes out of circulation in November 2016.
As of June 2018, the NPCI recorded 24.6 crore transactions on the payments interface, with funds worth Rs 40,834 crore being transacted.
This was higher than the 19 crore transactions where funds worth Rs 33,288 crore were transferred in May, the NPCI said.
Vivek Belgavi, partner and fintech leader, PwC India said that even with the first version of UPI, there is scope for more upside if more platforms build on the interface.
(This story was first published on BloombergQuint)
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