How the Unified Payment Interface Will Change Mobile Payments

by Joseph Walent 0

Use of mobile payments has lagged in the U.S., there is little doubt of that. In Europe and in Asia, the use of the mobile device as an instrument of payment continue to gains traction.

Mobile banking has surged in India in recent months as banks have pushed both retail and corporate customers to adopt platforms designed to transact on the phone. In the September-December quarter, the value of mobile banking transactions surged 82% over the same period last year.

The author recognizes some of the innovations forthcoming in the rollout of a unified payments interface (UPI) within the Indian economy. The centralized nature of the Indian economy provides necessary framework and standardization for the construction of the interface. Mercator Advisory Group recognizes one of the clear strengths of the UPI is the ability to pay nearly anonymously.

If you want to settle your bill with the cab driver at the end of the journey, you just have to give your virtual address and the driver will request money from it. Sure, the system will check with you.
You will get a message on your mobile phone asking for authentication.

Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require you to share bank details with either the driver or the cab service provider. Also, since UPI runs on Immediate Payment Service (IMPS) platform, the service will be available real-time and 24×7.

In order for more Americans to be more comfortable with mobile digital payments, Mercator Advisory Group contends a similar discrete but verifiable framework would need to be leveraged in order to gain wider U.S. consumer acceptance. However, with the power in determining standards less centralized in the U.S. system, there will be a period of years before we see a unified payment interface for mobile payments being widely used, at least until there is consensus amount the major players.

Overview by Joseph Walent, Senior Analyst, Emerging Technologies at Mercator Advisory Group

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