UPI payment within same account will be stopped from next month; NCPI brings new rule
This move can also lower the performance of UPI in coming months, because now users will only be able to carry transactions to other accounts.
The NCPI who manages government’s UPI payment app, has now decided to stop transaction from this digital app to same accounts from starting next month. This means, that any user of UPI will no longer be able to carry transfer or payment of amount in the same account as theirs. The move is seen to tackle artificial inflation of transactions. However, one needs to note that this move can also lower the performance of UPI in coming months, because now users will only be able to carry transactions to other accounts.
According to Economic Times report, NPCI said in a circular issued to banks that transactions where the payer and the payee account are actually the same will be blocked from August 1.
Reportedly the circular said, “While analysing the transaction patterns we have observed instances wherein both credit and debit accounts are same…customers are sending money from their account to the same account…these transactions do not serve any use case and also add unnecessary load on the system.”
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Therefore, NCPI stated that all such transactions will be blocked in case of UPI central system and not only this, it has also asked banks and payment service providers to follow the same.
Bankers told ET with multiple non-banking private entities jostling for a share in the UPI ecosystem, players were offering multiple cashbacks. This could encourage consumers to do multiple and unnecessary transactions to get cashbacks. The NPCI hopes to stop transactions which do not serve any known use case.
A senior banker with a private sector bank also told ET that such could reduce the growth of the number of transactions happening in UPI.
Cashless economy is a serious agenda for the Prime Minister Narendra Modi government. Not to forget, the launch of demonetisation was done to make India a cashless country. Post demonetisation, the government has boosted their digital transactions with apps like UPI, BHIM, Bharat BillPay and Bharat QR.
The latest data of NCPI revealed that, a total 246.37 million UPI transactions were made in June 2018 which was up by 30.02% compared to transactions made in May 2018 where it stood at 189.48 million. In value terms, UPI transactions stood at Rs 40,834.03 crore in June month, rising by 22.66% from Rs 32,288.51 crore in May month.
In April month, UPI transactions stood at 190.08 million in volumes worth Rs 27,021.85 crore.
This month’s transaction in volume terms is also highest in entire one year. In July 2017, UPI transactions were at just 11.4 million, they further increased to 105.10 million in November 2017 and further to 145.50 million in December 2017. Start of 2018 has also been good with 151.83 million transaction in January 2018, followed by 151.83 million and 178.05 million in February and March month.
Now with the new development coming in, we might see some changes in the performance of UPI transactions.