Digital transformation is being embraced at a rapid speed all over the country, and with this the payments and financial sector is also evolving. The Unified Payments Interface (UPI), one of the most widely used modes of payments, has reshaped the way we handle financial transactions.
UPI has seen two significant developments recently which has caught the attention of both- users and industry experts. The National Payments Corporation of India (NPCI), reinforcing its commitment to revolutionize India’s digital landscape, launched UPI ATM and Credit line on UPI at the Global Fintech Fest 2023.
UPI ATMs: Scan and withdraw money
The moment there is a requirement of cash, all that one needs to do is take the ATM card and withdraw the amount using the machine. Now, leveraging the UPI ecosystem, NPCI has reimagined the way people have been using ATMs by showcasing Interoperable UPI-Cash withdrawals.
“With this, any participating bank account holder can walk to a UPI enabled ATM to withdraw cash effortlessly using any UPI application, thereby eliminating the conventional method of using physical cards and streamlining the transaction process,” NPCI said in a statement.
In order to withdraw cash using UPI ATM, select the ‘UPI cash withdrawal’ option or similar term on the ATM and choose their desired withdrawal amount. Subsequently, a unique dynamic QR code will appear on the screen of the ATM machine. By scanning this QR code using any UPI app, individuals have to validate the transaction by entering the PIN on the mobile app and get the money.
Credit Line on UPI: New way of digital lending
Credit Line on UPI is another game-changing development in the digital payments space. It allows users to access credit seamlessly through their UPI apps, providing a convenient and swift alternative to traditional lending institutions.
With an aim to expand access to credit, promote financial inclusion and innovation, NPCI said, “With this, the process of availing, connecting, and utilizing credit lines will be significantly expedited, driving economic growth and progress.”
“This new offering enables pre-sanctioned credit lines from banks via UPI and will revolutionize customer access to credit, fostering a more streamlined and digital banking ecosystem. With this, the process of availing, connecting, and utilizing credit lines will be significantly expedited, driving economic growth and progress,” NPCI added.
The initiative of Credit Line on UPI encompasses several key features, including the linkage of pre-sanctioned credit lines, the creation of digital credit products by banks, the establishment of interest-free credit periods and corresponding interest rates, defined schedule of charges, customer engagement channels for credit sanction requests, and the ability to link various pre-sanctioned credit lines via UPI-enabled apps for transactions.
Also, to ensure seamless interoperability, all UPI apps, including bank and third-party apps, will be empowered to discover and link credit lines on UPI, as well as provide end-to-end customer lifecycle services.
These two groundbreaking initiatives not only enhance user convenience but also promote financial inclusion and further drive the adoption of digital transactions.