KKN Gurugram Desk | In a significant move to enhance the user experience, the National Payments Corporation of India (NPCI) is preparing to introduce a feature that will allow customers to save their preferred or most-used Unified Payments Interface (UPI) IDs on popular merchant websites. This feature is expected to make online payments faster and more convenient, reducing the number of steps involved in the payment process. However, before the feature can be officially launched, it will require approval from the Reserve Bank of India (RBI).

Simplifying UPI Payments: The New Feature

Currently, when customers make a payment through UPI on an e-commerce website or app, they need to select their UPI app and choose the specific account they wish to make the payment from. This process requires multiple steps, and while it’s relatively simple, it can be time-consuming for frequent online shoppers.

With the new UPI ID saving feature, customers will be able to save their UPI ID on e-commerce websites, travel booking platforms, food delivery services, and other quick commerce platforms. This will allow them to bypass the step of selecting their UPI app and account every time they make a payment, resulting in a faster and more efficient payment experience.

The feature aims to make UPI payments as convenient as online card payments, which have already been streamlined through the tokenization process, where users save their card details on websites and apps to avoid entering them repeatedly.

How Will This Change Impact Online Payments?

Once implemented, this feature will significantly improve the user experience for regular online shoppers and app users. With UPI becoming a preferred mode of payment in India, making the process quicker and more seamless could lead to an increase in UPI adoption.

If customers can save their UPI IDs on platforms they frequently use, such as e-commerce websites, travel apps, and food delivery platforms, it will reduce the friction associated with the payment process. This will make UPI payments as effortless as swiping a card, further driving the adoption of UPI as a mainstream payment method.

The Role of NPCI and RBI Approval

The National Payments Corporation of India (NPCI) has already started discussions with stakeholders in the industry regarding the implementation of this feature. However, before it can be rolled out to the public, NPCI will need to obtain approval from the Reserve Bank of India (RBI).

This approval process is important to ensure that the new feature adheres to the regulatory guidelines in place for digital transactions. As of now, NPCI has not provided an official timeline for when the feature will be launched, as the approval from RBI is still pending.

Addressing Security Concerns: UPI ID Saving and Risks

While the move to allow users to save their UPI IDs on merchant websites is a step towards improving convenience, there are concerns regarding the security of such a system. Industry experts have raised questions about the potential risks that could arise from saving UPI IDs on multiple platforms.

The main concern is the possibility of unauthorized access or misuse of the saved UPI IDs, especially if there is a security breach on any of the websites or apps where these IDs are stored. As the discussions with stakeholders continue, it’s clear that NPCI and the involved parties will need to address these security concerns to ensure that users’ personal and financial information remains safe.

Potential Benefits of the New Feature for Users and Merchants

For users, the ability to save their UPI IDs on frequently used websites and apps will drastically reduce the number of steps required to make a payment. It will save time and streamline the checkout process, making it easier for users to complete transactions with minimal effort.

For merchants, this feature could lead to an increase in successful payment transactions. With the simplified payment process, more customers are likely to complete their purchases, reducing cart abandonment rates. This could be especially beneficial for e-commerce websites, travel services, and food delivery apps, where frequent users would appreciate the convenience of faster payments.

Additionally, this move could encourage more users to embrace UPI as their primary mode of payment for online transactions, further promoting the use of UPI in India.

Concerns: Impact on Smaller UPI Apps and Competition

While the feature promises to make UPI payments more efficient, there are concerns regarding how it may impact smaller UPI apps. Large players in the UPI space, such as PhonePe and Google Pay, are already well-established and have millions of users. By allowing UPI IDs to be saved across various platforms, these apps might have an even greater advantage, as users may prefer to save their PhonePe or Google Pay IDs due to their familiarity and widespread adoption.

Smaller UPI apps may find it more difficult to establish themselves in the competitive digital payments market, as users are likely to gravitate toward the larger, more widely recognized platforms. This could further consolidate the market share of major players in the UPI ecosystem, potentially stifling the growth of newer or smaller UPI apps.

Industry experts have noted that the NPCI and the stakeholders involved need to carefully consider the implications of this feature on the competitive landscape of digital payments in India.

What Does This Mean for UPI and the Digital Payments Ecosystem?

India has already seen a dramatic increase in the adoption of digital payments, with UPI emerging as the dominant payment method for online and offline transactions. The addition of a feature that allows customers to save their UPI IDs on popular merchant websites is likely to drive even more growth in this space.

With the RBI’s involvement in approving this feature, it is clear that there is an emphasis on ensuring that the UPI system remains secure, efficient, and scalable. However, the key to the success of this feature will depend on how effectively it addresses the concerns of users and stakeholders regarding security and competition.

If successfully implemented, this feature could significantly streamline the payment process for millions of Indian users, offering them an experience that is as simple and seamless as using debit or credit cards for online transactions. It also has the potential to boost UPI adoption across various industries, making it an even more integral part of India’s digital payments landscape.

The Future of UPI: Will This Feature Lead to a UPI Revolution?

The implementation of the UPI ID saving feature could mark a major turning point in the evolution of digital payments in India. If users can save their UPI IDs across multiple platforms, the friction associated with making payments will be reduced significantly, leading to an increase in the adoption of UPI as the preferred payment method.

Moreover, if the feature encourages more users to adopt UPI, it could have far-reaching effects on how digital payments are made in the future. The ability to save UPI IDs could increase the volume of transactions made through UPI, making it the most widely used payment method in India, overtaking traditional card payments.

As the NPCI moves closer to rolling out this feature, it will be interesting to see how the industry adapts and how users react to this new change. Will it create a revolution in the way UPI is used, or will concerns over security and competition hinder its success? Only time will tell.

In conclusion, the NPCI’s plan to allow customers to save their UPI IDs on popular merchant websites is a positive step towards simplifying digital payments in India. If approved by the RBI, this feature could reduce the complexity of online payments and make UPI even more convenient for users.

However, concerns around security and the impact on smaller UPI apps need to be carefully addressed to ensure the feature’s success. As India continues to embrace digital payments, this move could serve as a catalyst for further growth and innovation in the UPI ecosystem, shaping the future of digital transactions in the country.