The Unified Payment Interface or UPI came into existence in April, 2016. Ever since, millions of Indians have used this system for making and receiving payments. It is essentially an electronic mode of payment, which can be used to transfer funds straight from your bank account without the need to type out your debit card details or your net banking password.
However, in light of the success of the UPI, the government of India is now planning to launch the second version of the same, dubbed UPI 2.0. This version will include all the features of the previous one, but will also include one additional feature. This feature will allow the user the ability for a one-time authentication for repeat payments to beneficiaries, similar to the way post-dated cheques work. This new feature is known as eMandate.
Let’s take a look at what the introduction of eMandate can mean for you and what the future of UPI 2.0 looks like.
Easy EMI and loan payments
Since the eMandate feature allows for a one-time authentication procedure for repeat transactions, you would not have to keep authenticating the EMI payments each month. You can simply authenticate the transaction the first time and sit back. All of the other payments will be made each month automatically.
This will reduce the friction significantly and streamline the loan repayment procedure. The same applies for any repeat payments that you have to make. For instance, the house rent can also be authenticated once in a similar manner.
Collection costs for small loans will decrease
Currently, the collection costs for small loans are cumbersome, as they can increase the total expenditure. The loan repayment process includes either electronic clearance service (ECS) or post-dated cheques (PDC), both of which involves quite a bit of hassle. With the introduction of the eMandate through UPI payments, the collections costs will most likely go down.
Greater savings and insurance purchase
With the introduction of the UPI 2.0, there is a high chance that people will start saving more. This is because it will become simpler for people to sign up for saving products in the market. For the same reason, people are likely to purchase insurances as well. This will boost the financial growth of the entire country.
Therefore, it seems as if the UPI 2.0 introduction will shake up the Indian market. The eMandate will mostly have a positive effect on the economy as well as on the individuals. However, only the future will show how the new UPI affects people.
However, in light of the success of the UPI, the government of India is now planning to launch the second version of the same, dubbed UPI 2.0. This version will include all the features of the previous one, but will also include one additional feature. This feature will allow the user the ability for a one-time authentication for repeat payments to beneficiaries, similar to the way post-dated cheques work. This new feature is known as eMandate.
Let’s take a look at what the introduction of eMandate can mean for you and what the future of UPI 2.0 looks like.
Easy EMI and loan payments
Since the eMandate feature allows for a one-time authentication procedure for repeat transactions, you would not have to keep authenticating the EMI payments each month. You can simply authenticate the transaction the first time and sit back. All of the other payments will be made each month automatically.
This will reduce the friction significantly and streamline the loan repayment procedure. The same applies for any repeat payments that you have to make. For instance, the house rent can also be authenticated once in a similar manner.
Collection costs for small loans will decrease
Currently, the collection costs for small loans are cumbersome, as they can increase the total expenditure. The loan repayment process includes either electronic clearance service (ECS) or post-dated cheques (PDC), both of which involves quite a bit of hassle. With the introduction of the eMandate through UPI payments, the collections costs will most likely go down.
Greater savings and insurance purchase
With the introduction of the UPI 2.0, there is a high chance that people will start saving more. This is because it will become simpler for people to sign up for saving products in the market. For the same reason, people are likely to purchase insurances as well. This will boost the financial growth of the entire country.
Therefore, it seems as if the UPI 2.0 introduction will shake up the Indian market. The eMandate will mostly have a positive effect on the economy as well as on the individuals. However, only the future will show how the new UPI affects people.
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