Turning a mobile into a debit card (phasing out cheques and cash transactions)

UPI

The way we deal with cash transactions has drastically changed. Bank transfers, credit card payments, loan clearances and bill payments have all gone online. Technology has been disrupting different aspects of the financial landscape, even before users have realised it.

The landscape is set to be transformed even further. The Unified Payment Interface (UPI), which was launched in April by the National Payments Corporation of India (NPCI), will become available for public use by end of June. As many as 16 scheduled commercial banks are set to go live with their UPI applications when the platform becomes operational on July15. Importantly, you can use UPI services on Sundays and public holidays as well.

The UPI is one step ahead over the current real-time money transfer system (IMPS). Sending money in real-time, 24x7, via any channel was already possible. Now with UPI, NPCI has improved the process by making it a real-time collect system.

Earlier, for sending money, one required the bank account number and other details. Now, money transfer can happen only with an email-like financial address.

A P Hota, MD & CEO, NPCI, explains, “Suppose I want to send money to you and you have already registered with UPI, you can generate a virtual ID as your financial address, say — ABC@xyzbank — and I can send money to this address. XYZ Bank will translate this to make the deposit in the appropriate account. So, the financial address is email-like.”

Meanwhile, NPCI has major plans to phase out not only cash, but also cheque transactions from India. In this connection, NPCI will be launching Bharat Bill Payments System (BBPS) by the end of June, which will offer a bill payment system, both online and offline. It will permit bill payments through multiple modes — Net banking, credit cards, debit cards, e-wallets and cash. The facility will pay utility bills and permit the payment irrespective of the location of the payer.

Cashless facilities are also making their mark in other domains. For the first time in India, citizens availing bus services will be able to travel cashless in Bengaluru. The Bengaluru Metropolitan Transportation Corporation (BMTC) and Axis Bank have joined hands to introduce the 'Axis Bank BMTC Smart Card'. Passengers can pay for their journey by just tapping on Electronic Ticketing Machines (ETMs) with the smart cards.

This is India's first prepaid transit card. Apart from commuter services, this facility will allow users to shop at over 1.2 million merchant outlets across the country without having to carry multiple cards. Axis Bank has partnered with NPCI for this project by introducing a single-payment window for all modes of travel like Metro, cabs and auto rickshaws.

Barrier-free tolling

The National Highways Authority of India (NHAI) has given NPCI the responsibility to build a clearing house for e-tolling. Under this system, NPCI is envisaging a barrier-free tolling system, which will allow commuters to zip through toll plazas across the country.

FASTag will offer near non-stop movement of vehicles through 275 toll plazas and offer the convenience of cashless payments of toll fees, with nationwide interoperable electronic toll-collection services. India currently has 350 toll plazas in place. FASTag will become operational at the remaining toll plazas within a year.  

NHAI will give 10 per cent cash-back incentive on toll payments for FASTag users. The cash-back amount for a particular month will be credited back to the FASTag account at the beginning of the next month. NHAI has tied up with ICICI Bank and Axis Bank for this service. FASTag has a onetime fee of Rs 200 and is affixed on the windscreen of a vehicle. It employs for making toll payments directly from the prepaid account linked to it.

Initially, NHAI has mandated electronic toll collection (ETC) gates on only one lane on each side of the toll booths. Gradually, it will increase this when the cards are issued in larger numbers. It is expected that in two-three years from now, most of the lanes will be ETC lanes. The cards will be sold mostly through toll booths and petrol pumps.