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India plans new digital payments product for feature phones

The National Payments Corporation of India (NPCI) is working on a digital payments product for feature phone users and those who do not use mobile applications. The product is currently only at the proof of concept (POC) stage.

A news report quoted Praveena Rai, the chief operating officer of NPCI saying, “We need to move into the market which is feature phone-based. Moving towards voice-enabled payments will be the trend of digital payments that we should see and India will be a clear innovator there.”

In 2020, NPCI, CIIE.CO, and the Bill and Melinda Gates Foundation launched a hackathon looking for a feature phone-based payments solution. The new product, set to be launched in the coming months, is an outcome of that hackathon, where fintech groups Gupshup, Minkville and Tonetag were adjudged the top contestants.

The report further noted that while NPCI initiated an SMS-based payment solution called Unstructured Supplementary Service Data (USSD) in 2016, it fell out of use following the launch of the Bharat Interface for Payments (BHIM) app in late 2017.

NPCI is also running another hackathon on payment authentication, which was launched last month. Rai said that this particular competition is aimed at looking for better ways of authenticating UPI transactions while making the security systems stronger than they presently are. The solutions should be UPI-integrated, which showcase the end-to-end onboarding of customers and authorisation of transactions. They must also provide parameters to enable the risk scoring of users and transactions.

The organisation continues to explore the possibility of making the country’s transit systems digitally enabled. The Delhi Metro’s Airport line has a QR code-based ticketing system. The solution is now being extended to bus services, with Canara Bank already running the project in Bengaluru. NPCI plans to make this a pan-India solution, the report mentioned.

In February, NPCI said it was upgrading the IT systems of all its key payment channels, including the Unified Payments Interface (UPI), Immediate Payment Service (IMPS), Aadhar-Enabled Payment System (AePS), and the National Automated Clearing House (NACH).

The modifications will focus on enhancing capabilities to process increased volumes, improving resilience to external outages seen at banks, and will include an architectural revamp of IT systems to better process credit return pile-ups, as OpenGov Asia had reported.

The move was made as the organisation anticipates online transactions to soon hit a billion a day. NPCI aims to complete these system migrations by the end of FY21. The upgrades will not only deal with current concerns but will also consider the scope for future growth and the related complications.

More recently, last week, in continuation of the Reserve Bank of India’s vision for a customer-friendly and transparent dispute redressal mechanism (ODR), NPCI announced it was going live with ‘UPI-Help’ on BHIM-UPI, a part of Digi-Help stack. The redressal mechanism will create a superior and hassle-free experience on issue resolution for BHIM UPI app users.  The UPI-Help will enable BHIM UPI users to use their app for the following:

  1. Check status for pending transactions.
  2. Raise complaints about transactions that have not been processed or money that was not credited to the beneficiary.
  3. Raise complaints about merchant transactions; UPI-Help can resolve complaints online for person-to-person (P2P) transactions.

Additionally, in case of pending transactions where the user does not take any action, the UPI-Help shall also proactively attempt to auto-update the final status of the transactions on the app.

NPCI was incorporated in 2008 as an umbrella organisation for operating retail payments and settlement systems in India. It is focused on bringing innovations in the retail payment systems through the use of technology and is working to transform India into a digital economy.

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