MUMBAI: Banks will have to offer account holders an option to activate the Unified Payments Interface (UPI) service using the Aadhaar and OTP instead of debit card from March 15, 2022. This follows the introduction of this feature by the National Payments Corporation of India (NPCI) in September 2021.
The new feature was introduced to enable customers who either do not have a debit card or whose debit card has not been activated to start using UPI. This was made possible by connecting NPCI to the Unique Identification Authority of India on behalf of the customer’s bank. While NPCI had enabled this feature, it was up to the banks to extend the same to their customers.
However, this would be possible only if the UPI application is used on the same mobile which has the Aadhaar-registered mobile number and the same number is registered with the bank. NPCI had initially asked banks to comply by December 15, 2021. But due to a delay in readiness as priority was given to other product features, the timeline was extended to March 15, 2022.
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Currently, most of the bank applications require the customer to authenticate themselves using their debit card. This would mean that the UPI feature is available only to those who have access to digital banking.
According to the Pradhan Mantri Jan Dhan Yojana website, which gives details on the coverage of the universal bank account scheme, there are nearly 45 crore beneficiary accounts. Of these, almost 30 crore are in rural and semi-urban centres and the remaining in urban and metro centres. However, only 31.4 crore beneficiaries have been provided a RuPay debit card. Also, bankers say that many account holders have not activated their debit cards.
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The RBI is now trying to push UPI as a financial inclusion tool by extending the services to feature phones. On Tuesday, RBI governor Shaktikanta Das launched UPI 123Pay — a simplified form of the account-to-account transfer service that can be undertaken using feature phones. The RBI has allowed payment service providers to enable feature phones using one of four technologies — interactive voice response, missed call, feature phone app, or proximity sound-based payments.
