UPI and USSD are about to be get more feature-rich and sport new interfaces; here's how they work

A new UPI app that is common among banks and payment platforms is in the works and should be launched in a week's time. Along with this, a more feature rich version of the USSD is also in the works which lets you perform banking operations from even a feature phone.

Demonetisation has started the conversations around alternative ways of making and receiving payments in India. While the first thing that come to mind are digital wallets, we need to understand that for a major part of India, switching directly to wallets is not the easiest option. Online transfers are the most commonly used means, but this year the government is pushing forth for transacting using two technologies which have not really achieved their true potential — Unified Payments Interface (UPI) and Unstructured Supplementary Service Data (USSD).

According to a report in Economic Times, a new UPI app that is common among banks and payment platforms is in the works and should be launched in a week's time. Along with this, a more feature-rich version of the USSD app is also in the works, which lets you perform banking operations from even a feature phone.

Right now, UPI is a feature that is offered on a majority of banking apps — there are 33 banks so far which are UPI signatories. Some banks which support UPI have even released separate UPI focussed app. This can lead to some confusion, especially in a post-demonetised India, where daily transactions on the UPI platform have doubled to 70,000, according to AP Hota, MD of National Payments Council of India (NPCI), which hosts the two platforms and handled retail payments on them. The existing UPI focussed apps from different banks will continue to exist.

On the USSD front, around 51 banks support it and the daily transactions on it has jumped from 1.5 lakh to 6.5 lakh per day post demonetisation. However, a startlingly low number of these transactions involve transfer of money. According to Hota, the new platform will integrate more deeply with feature phones, where you can not only send but also initiate a collect-money feature.

Unified Payments Interface (UPI)

Mobile apps supporting UPI payments in the Play Store.

Mobile apps supporting UPI payments in the Play Store.

The all-new Unified Payment Interface, was launched on 11 April this year. The objective was to bring a unified platform that enables P2P money transfer, B2C and M2M transfer, all under one umbrella. Since this is done with the support of the RBI and the Indian Banks Association, it comes across as any standard feature such as NEFT or IMPS. Besides, unlike wallet services such as Paytm, it ends up as a default service on existing banking apps.

What’s interesting with UPI is that you could simply share your identifier, which resembles an email address. For instance if your name is Manoj and you hold an account with HDFC Bank, you could select a unique identifier such as manoj@hdfcbank. That’s all you would ever need to share with anyone who needs to send you money. No hassles around IFSC, Bank account number or any other numbers. Since the sender has selected his/her user ID, it’s authenticated to the account. It’s also easy to remember and convenient.

In an ideal world, you could step into your local bakery (let’s call it Tasty Bakery), make your purchases and when it comes to paying, you could simply open your app and enter tastybakery@icicibank and you’re done. All of this form your bank’s default app. This simplifies the whole process for numerous customers who have concerns over messing up the transaction online. Especially late adopters of mobile payment.

Unstructured Supplementary Secure Data (USSD)


The *99# number is a USSD-based mobile banking service which brings together NPCI along with banks and telcos. According to the NPCI website, this is the list of participating banks, participating telcos and multi-lingual codes for the *99# service.

Using the *99# service, you can check your account balance, mini statement, send money using MMID, send money using IFSC and generate MPIN.

This system purely works on the existing SMS system. You don’t need any smartphone and this can work on even the most dumb phones out there, including the feature phones. It uses your voice connectivity service to transmit data in the form of SMS. And there are no additional charges on roaming to use this service. It works 24×7 and even on bank holidays.

You need to link your mobile number to your bank account and dial *99# to start the service. It gives you the option to enter the first three letters of your bank or the first four letters of your IFSC code, choose options to transfer funds or view balance which will ask you for payee’s mobile number and MMID. You enter your amount and MPIN along with last four digits of the account number.

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