The National Payment Corporation of India (NPCI), which oversees UPI payments in India, is set to introduce a new feature for UPI users. This upcoming enhancement will allow users to save their preferred UPI IDs on merchant websites, streamlining the online transaction process. Currently, buyers must select their favorite UPI app and corresponding bank account during checkout on these sites. The new feature aims to elevate UPI to the same level as card payments, where users can tokenise their card details for a smoother transaction experience.
How this feature will work
The Reserve Bank of India (RBI) currently permits payment gateways to tokenise card information. This data is stored on merchant websites in an encrypted format, enabling users to simply enter an OTP when completing an online purchase. Similarly, NPCI will need approval from the RBI to enable UPI users to save their UPI IDs on merchant websites.
Once granted, users will no longer need to input their UPI ID or select their preferred UPI app and bank account every time they make an online transaction.
However, there are concerns that this move could disproportionately benefit major third-party UPI apps like PhonePe and Google Pay, which already handle over 80 percent of UPI transactions.
NPCI is referring to this concept known as UPI Meta. Although this initiative has not yet been officially launched or formalised as a recognised protocol, NPCI officials have proactively engaged in discussions with key industry executives to outline its potential applications and impact.
This exploratory phase indicates a strategic move towards enhancing the Unified Payments Interface (UPI) ecosystem.
Meanwhile, on April 12, the National Payments Corporation of India (NPCI) reported a significant increase in requests from certain banks using the "Check Transaction" application programming interface (API). This increase resulted in a temporary slowdown of the system and a notable decline in payment success rates for several hours.
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