Real-time payments have seen a steady worldwide growth in the past few years. Growing consumer demand for a speedy and convenient transaction has provided impetus to the popularity of RTP over traditional payment methods. With financial transactions now taking place with a single stroke on your mobile screens, It’s time the financial institutions took cognizance of the situation. This article explores the significance of real time payments for banks and other payment providers.
What exactly is RTP or UPI?
Real-time payments are electronic payment solutions that are available 24/7/365. In India, UPI or Unified Payments Interface facilitated by NPCI is the platform which provides real time payment solutions. It is a system that powers multiple bank accounts into a single mobile application, merging several banking features, seamless fund routing & merchant payments under one umbrella. Majority of the banks have their own UPI app for all the mobile platforms.
Here’s how real-time payments score over traditional methods:
Immediate transfer of funds: UPI enables the instant transfer of funds from the payer’s account to the payee’s, typically in a fraction-of-a-second of the initiation of the transaction. In internet banking and mobile banking, the customer is required to go through some time consuming preliminary steps like registration of payee or beneficiary etc. Here, UPI has a remarkable edge over net banking as it eliminates the step of third-party payments with the introduction of VPA (Virtual Payment Address).
Instant acknowledgment: With smartphones having made a permanent residence in the pockets of individuals, it only makes sense to broadcast every piece of information through it, including the status of the transaction and account statement. When the payer initiates the payment, they are informed via SMS within a few seconds whether the payment or transaction was successful or not.
Single and centralized identity:
UPI provides you with a virtual payment address so that you can transfer money between accounts without switching multiple profiles. With just a VPA and a click, the payment is done. At the end of the day, UPI allows the customers the freedom to transfer their money as and when they like, with or without their phones, acting as one key for all purposes.
The updated version of UPI called UPI 2.0 has even better and enhanced features such as below
One-time mandate: With this feature, customers will be able to pre-authorise a transaction and pay later. UPI 2.0 mandates are created with one-time block functionality for transactions.
Linking of overdraft account: In addition to current and savings accounts, customers can now link their overdraft account to UPI. Under this feature, customers would be able to avail all the benefits associated with OD (overdraft) account.
Signed intent and QR: Customers can now check the authenticity of merchants by scanning QR or quick response code.
Invoice in the inbox: This feature helps customers to check invoice sent by the merchant during the transaction. This will allow customers to view and verify the merchant credentials and check whether it has come from the right merchant or not.
The benefits of real-time payments to banks and customers are many. For instance, customers no longer need to go through the hassles of obtaining a cashier’s check for big-ticket purchases like a car. In fact, many of these transactions are now done instantly through mobile devices. The instant verification of identity and transfer of money indeed makes the entire process smooth… Real-time infrastructures could eventually replace other modes of payment such as cards, checks and other traditional methods of payments. To know more about: real time confirmation solution provider