Prelims: Current events of national and international importance | Economy
Why in news?
A decade after the launch of the Unified Payments Interface (UPI), RBI launched a ‘tap and pay’ facility for UPI transactions, moving towards a new phase of digital payments.
- ‘Tap and pay’ facility – It seeks to make transactions faster through RuPay credit cards without the need for OTPs or QR codes.
- Partnership with – National Payments Corporation of India (NPCI).
- Working – The new feature uses the point-of-sale (PoS) terminal’s internet connectivity, allowing a transaction to be completed even when the customer’s mobile device does not have internet access.
- Payment limit – NPCI said the facility is currently available for transactions of up to Rs. 5,000 & for higher-value transactions, customers will have to enter their PIN.
- UPI’s scale – UPI has emerged as India’s dominant electronic payment system, accounting for about 85% of transactions.
- Reason for launching codeless facility – Current QR-based payments can face issues such as
- Poor network connectivity.
- Difficulty scanning QR codes due to lighting conditions.
- Friction in completing transactions.
- Concerns over fraud, including incidents involving the theft or inadvertent sharing of OTPs and other authentication credentials.
- Need for the changes – The regulatory focus on reducing payment fraud and ramping up data security comes in the backdrop of slowly increasing AI-based security attacks on financial systems all over the world.
- Other payment Modes
- Visa & Mastercard – Have introduced passkeys as an additional authentication mechanism; depending on the device and payment system, authentication can involve a PIN, fingerprint or the method used to unlock a smartphone.
- Mastercard has showcased its Consumer Device Cardholder Verification Method (CDCVM), which allows transactions to be authenticated through a device’s biometric capabilities, including fingerprint or facial recognition.
- Amazon Pay – Accounts for less than 1% of UPI transactions- has also introduced a tap-and-pay facility for its partner merchants as it seeks to expand its presence in the digital payments market.
Reference
The Hindu | UPI heads towards a code-less era, a decade after its debut
