25 August 2016. India achieved Big Target even though it was late as per timetable. But still it is big achievement. RBI Governor Raghuram Rajan inagurate Mobile payment method which makes your phone number as your account. So what? Why it is important? Something similar is available in US and other countries also.
Here I am trying to tell you Why Unified Payment Interface is so important.
India is a country where not many people are under banking system. Cash transactions are famous and not many people have Credit or debit card. Why think about bank account, there are many peoples Who adont have home or the facilities are insufficient. Rural area situation is more bad. Not big penetration of Banking. There are some non banking finance companies or You may call them Shadow Banking which are doing good. All because of it many people are out of financial system. They don’t have easy access to Debt. Retail debt market is nearly non-existent. Wholesale Debt market is dominated by One big seller. Govt for whome RBI is doing all banking. Buyers are mainly banks, LIC and some other.
There was less development because of less availability of Capital. One reason is domestic people are not keen or it was not easy to do it. Still today there are many people INVEST in insurance policy. As rate of return is low, they hardly earn anything if compared against inflation. All because of it there are many people who fall victim to Ponzi schemes.
All this makes financial situation bad.
Then there was Raghuram Rajan. RBI Govr.
After Receiving The duty at RBI, He came up with concept of Five Pillars. Financial Inclusion is important part out of it. For that he came up with concept of Different type of Bank. He also set-up committee under Nachiket Mor. The committee advise for six pillar Strategy.
Universal Electronic Bank account is like starting point for many things in finance like insurance, investment. Due to Aadhar card, it is easy for all people to open Bank account. RBI also Give permission to set-up payment banks. Limited power but important. RBI also permitted Peer to Peer Loan companies as NBFCs
And here comes the UPI into the picture
For making it easy interaction and making India less dependent on Cash, RBI come up with the concept.
It was not new. PayTM is doing it and upto certain limit, PingPay, Axis Bank application is also doing the same. They don’t need if you have bank account for transaction.
Say I want to send you money. But I don’t have your bank account details. Now? Simple. I will send you the amount with a link. When you open the link in social media, you can easily kept That amount into your bank. Or I will send you coupons whenever you will download the PayTM or any other applications, you can use as you need.
RBI went one Step ahead. UPI. The reason is simple.
India is a country where smartphone is easy to find.after the success of Aadhaar card, Pradhanmantri Jan Dhan Yojana make it possible for many people to open their account.
As of date 22 banks with some shocking name come up with the Application on first day. More are supposed to join.
What is it?
Specially made application where you can make account with your number and then Start payment with just your mobile number. It is not regular application of bank but specially made for the Cash less transaction.
Before writing this I take the trial of the application of Union Bank UPI application. Not very much attractive like PayTM. But still useful. The best thing for the application is with the help of simple mobile number, I wil send money to anywhere in the world. This is something which make your phone as your Bank and your bank account as big wallet.
You may check my view on UPI on my tweet.
The companies Which are burning now are Visa, MasterCard, PayPal. UPI just vanish need for Card, And will give compitition to PayPal.
— Ashutosh Tilak (@androidashu) August 26, 2016
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