Unified Payment Interface (UPI)

1. Unified Payment Interface (UPI)

2. DEFINITION of 'Unified Payment Interface (UPI)' A Unified Payment Interface (UPI) is a single window mobile payment system launched by the National Payments Corporation of India (NPCI). The system is designed to provide a simple, secure and convenient “single interface” to enable sending and receiving of money using smartphones through a "single identifier" which can be a virtual address like an email ID, mobile number or Aadhaar number (like the Social Security Number). It eliminates the need to enter bank details or other sensitive information each time a customer initiates a transaction.

3. A money transfer scheduled on a predetermined date to pay a recurring bill. Automatic bill payments are routine payments made from a banking, brokerage or mutual fund account to vendors. Automatic payments can be made from a checking account or credit card. They are usually set up with the company receiving the payment, though it’s also possible to schedule automatic payments through a checking account’s online bill pay service. Automatic bill payments occur over an electronic payment system, such as the Automated Clearing House (ACH).

4. BREAKING DOWN 'Unified Payment Interface (UPI)' • The Unified Payment Interface is intended to enable peer-to-peer immediate payment via a single click two factor authentication process. UPI will use existing systems such as Immediate Payment Service (IMPS) and Aadhaar Enabled Payment System (AEPS) to ensure seamless settlement across accounts. It would facilitate push (pay) and pull (receive) transactions and even work for over-the-counter or barcode payments as well as for multiple recurring payments such as utility bills, school fees, other subscriptions. • Once the system based on a single identifier is established, it allows mobile payments to be delivered without the use of credit or debit cards, net banking or any need to enter account details. This would not just ensure greater safety of sensitive information, but connect people who have bank accounts via smartphones to carry out hassle-free transactions. Overall, UPI implies fewer cash transactions, and it could potentially reduce the unbanked population.

5. BREAKING DOWN 'Chained Payment‘ by Unified Payment Interface • Technological advances are rapidly shifting the commercial landscape from a physical one to a digital sphere. In the financial industry, traditional services and products that could be obtained in a physical location and by conversing with a human financial professional can now be gotten online thereby foregoing costs of transportation and minimizing valuable time expended meeting with a human. Fintech, technology in finance, aims to disrupt the norm of doing things by making services and goods accessible to everyone at minimal costs. In other words, Fintech innovations aim to promote financial inclusion of all people in all continents. Financial inclusion dictates that a consumer should be able to access and make payments for products on any platform at a small cost. Digital payment platforms and online retailers are warming up to this ideology of maximizing the customer’s experience and are inventing new ways goods can be purchased by the customer conveniently. Innovative payment mechanisms like digital chained payments are being implemented for consumers who have a need to make payments to multiple sources or providers of a good or service while minimizing transactional costs.

6. A statement that summarizes an economy’s transactions with the rest of the world for a specified time period. The balance of payments, also known as balance of international payments, encompasses all transactions between a country’s residents and its nonresidents involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts. The balance of payments classifies these transactions in two accounts – the current account and the capital account. The current account includes transactions in goods, services, investment income and current transfers, while the capital account mainly includes transactions in financial instruments. An economy’s balance of payments transactions and international investment position (IIP) together constitute its set of international accounts. BREAKING DOWN 'Balance Of Payments (BOP)' • Despite its name, the “balance of payments” data is not concerned with actual payments made and received by an economy, but rather with transactions. Since many international transactions included in the balance of payments do not involve the payment of money, this figure may differ significantly from net payments made to foreign entities over a period of time.

7. A type of fixed-rate mortgage in which the payment increases gradually from an initial low base level to a desired, final level. Typically, the payments will grow 7-12% annually from their initial base payment amount until the full payment is reached. BREAKING DOWN 'Graduated Payment Mortgage' • In a graduated payment mortgage, only the low initial rate is used to qualify the buyer, which allows many people who might not otherwise qualify for a mortgage to own a home. This type of mortgage payment system may be optimal for young homeowners as their income levels gradually rise to meet higher mortgage payments. • An option to make minimum payments on an payment option ARM, which is a complex mortgage product with a temporary low interest rate. After the expiration of the temporary start rate, the borrower retains the option to make a payment equal to the initial payment established by the start rate: the minimum payment option. Unfortunately, there is a high probability that choosing this minimum payment will create negative amortization, where you owe more after making payments than you owed before you started paying the loan back.

8. BREAKING DOWN 'Payment Option ARM Minimum Payment' • Making the minimum payment on a payment option ARM may be used by a borrower with irregular cash flows throughout the year. For example, a borrower who receives a large percentage of their annual income in the form of a year-end bonus might make minimum payments for a large part of the year, and then make a single large mortgage payment when they receive their annual bonus. Or, a borrower might make a minimum payment to make a home more affordable while counting on the rate at which the value of their home appreciates to outpace the rate at which negative amortization takes place. Source: http://bit.ly/2juuXKJ

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