Leveraging Unified Payments Interface (UPI) Best Practices in North America
The Unified Payments Interface, or UPI, is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments under one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience.
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UPI has been so elegantly executed that it makes using UPI simple for all involved in the transaction. Here are some of the key features that make UPI very attractive:
1. UPI service can be used 24/7 as well as on all Public holidays.
2. It allows a single mobile application to access various bank accounts.
3. It allows the user to make all types of payments – merchant payments, utility bill payments, in-app payments, over the Counter payments & barcode-based payments
4. It’s open for continued innovation
SEBI also recently announced that UPI will soon be available for retail investors to make IPO payments.
And RBI has announced that it will allow fund transfers from one UPI to another. For example, a user will now be able to transfer money from their PayTM account to their Google Pay account.
UPI is available on all platforms – Windos, IOS and Android, and the apps have a very user-friendly interface.
So what can we learn from UPI and apply to payments in North America? - Although, I doubt we’ll see a like for like system like UPI in the US, that doesn’t mean we can’t leverage the current infrastructure i.e. The Clearing House - RTP service or the upcoming Federal Reserve Bank FedNow service to provide the same sort of capabilities. I’d actually encourage these institutions to see how they can adopt some of UPI core capabilities. I certainly wouldn’t be the first to do so, as Google has been on the record asking the Federal Reserve Bank to adopt the UPI model for its FedNow service. And if you can partner with solution providers that have experience with the UPI model this will undoubtedly help you and your firm in providing a UPI like experience here in the US.
