Why in news
- The Unified Payments Interface marked ten years of operation since its launch on August 25, 2016.
What is UPI?
- A real-time payment system developed by the National Payments Corporation of India (NPCI) for inter-bank peer-to-peer and person-to-merchant transactions.
- Operates on top of the Immediate Payment Service (IMPS) infrastructure under RBI oversight.
Architectural and functional reach
- Consolidates multiple bank accounts into a single mobile application, enabling instant money transfers without sharing sensitive account details.
- Expanded internationally to enable cross-border remittances and merchant payments across multiple partner nations.
Why it matters
- Forms the core transaction layer of the India Stack, facilitating financial inclusion and reducing cash velocity in the economy.
- Serves as a global public infrastructure model for real-time retail digital payments.
Key terms
NPCI
An umbrella organization for operating retail payments and settlement systems in India, set up by RBI and IBA under the Payment and Settlement Systems Act, 2007.
India Stack
A set of open APIs and digital public infrastructure enabling identity, payment, and data governance solutions.
Prelims facts
- NPCI was established under the provisions of the Payment and Settlement Systems Act, 2007, as an initiative of RBI and IBA.
Mains discussion
- Evaluate the role of open-architecture Digital Public Infrastructure like UPI in accelerating financial inclusion in India.
Source: Business Standard