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Should USA Take Notes from the Indian UPI Structure?

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Will USA lose the position of leader in finance?

The indisputable worldwide leader in finance for a very long time has been the United States of America. The nation is the center of economic advancement and growth. Given the recent seismic developments that have occurred, including those sparked by India’s ground-breaking Unified Payments Interface (UPI), the position of authority could quickly alter in the near future. The country’s transactions business is being revolutionized by an enormous success record.

Over 30 nations have voiced interest in implementing UPI. This is a clear indication that the industry is paying attention to this ground-breaking idea with its limitless possibilities. On the contrary, the majority of wealthy nations still rely on card methods, which are relatively inefficient. 

A pathbreaking Indian Technology that is revolutionizing payments

No other nation has been successful in accomplishing as much through UPI as India has done on the international stage. India uses UPI as its method for immediate distant payments. UPI is primarily an open-source API (Application Programming Interface). The consumer accessibility of UPI is among its most innovative aspects. On any compatible mobile app, anybody can manage all of one’s financial transactions and bank accounts.

FedNow is the closest alternative in the US. The structure developed and forwarded through the Federal Reserve is similar to the real-time gross settlement (RTGS) system in India.

FedNow in USA, Credit: PYMNTS
FedNow in USA, Credit: PYMNTS

It is very distinctive from the UPI which navigates itself via various non-profit organizations, including the National Payments Corporation of India (NPCI). The US has not yet achieved the immediate remote payments, but this is the closest they have come. The discrepancies among both UPI and FedNow clearly demonstrate the underdevelopment of the US process as opposed to India.

Know more about the Unified Payments Interface (UPI) functionality

Unified Payment Interface (UPI)
Unified Payment Interface (UPI)

The unified payments interface (UPI) is a functionality. Through UPI you may move funds between bank accounts across a single application. This implies that you can shop, pay the bills, or authorize transactions by sending or receiving money or scanning a quick response (QR) code to pay a person, a business, or a service provider. 

All you require to enable mobile payments is mobile payment software and the payee’s digital address, which looks like something such as mybusiness@xyzbank. This suggests that payments can be made in a single step immediately to a vendor’s or a person’s bank. There isn’t a step that needs to be repeated. For instance, entering your bank account numbers or other confidential material every time you have to pay for something.

Is it safe to use these frameworks?

The safest framework for contactless payments is UPI. Some safety features back up this assertion:

Safety Features
Safety Features

Safety During Confirmation: The major characteristic is the contact number confirmation of the mobile during the application procedure. Your UPI profile linked to your number as a result will serve as a source of identification. If your phone number changes, you must start the verification system all over again.

You can restrict a mobile number in case of device loss to stop the event of any further bank account activities. This provides protection from identity theft.

Safety During Money transfers: The UPI offers the opportunity to create a 4- or 6-digit mobile pin, or MPIN when registering. The MPIN can be used to validate each activity after it has been established. Because the MPIN is unique to you, it prohibits another individual from using the app on your mobile device to withdraw funds from your account.

Security During Verification of Other Parties: Another UPI system option enables you to verify the legitimacy of businesses in order to stop scams. You can determine whether or not the business has been confirmed by UPI using the Quick Response or QR code and confirmed purpose alternative.

You immediately get to know if the trader is not UPI-certified. The likelihood of altering a QR code is also quite minimal, which increases the integrity of UPI transactions.

The adequate safety measures and user-friendly functionalities makes UPI a good choice for the US finance industry.

Ujan Chakraborty
Ujan Chakraborty
Nothing but Blue Skies.
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