80. UPI : Plug-in
As you are aware, UPI can be used for P2P, P2PM and P2M type of transactions. I am sure you have read the basics of UPI (This article)
UPI P2PM and P2M works in two major ways — Collect (Pull) and Intent (Push). For basics — Read this article.
There are various variants of UPI flows a merchant/PA/PSP implement — let’s see what those are.
- Collect:
We have two variants of collect flow
a. VPA based
b. UPI Number based
First, the customer has to select the default UPI Number in her TPAP (it can be a mobile number or an 8–9 digit unique number).
- Enter the UPI Number in the specific place given on the checkout page
- NPCI will resolve the UPI Number and send a collect request to appropriate TPAP
- Next Steps will remain the same as a VPA based collect request.
2. Intent Flow
Other UPI Flows:
- TPAP Specific Flow: You might have seen PhonePe and G Pay on checkout page apart from UPI. These are TPAP specific flows but these are not pure UPI flow but Payment container flows. Meaning: If you click on PhonePe then it will show UPI and wallet for transaction.
Note: There is commercial difference between generic UPI flow and PhonePe TPAP Flow
- Google Pay’s omni-channel flow: User can enter a mobile number, and it resolves the UPI ID attached to that mobile number and then proceeds with the UPI transaction flow.
Note: Sort of redundant flow considering now we have UPI Number Flow
- In App Flow: Users don’t have to switch to TPAP/UPI App. The ‘common library’ will be opened within the merchant’s App. Supported by Few TPAPs (e.g., Google Pay)
Note: After launch of UPI Number based flow feature, this flow will not have much value
- QR Code: QR is nothing but intent or push payment model. There are two types of QRs: (a) Static QR: where user has to enter the amount (b) Dynamic: User doesn’t need to enter the amount
UPI on Feature Phones:
Above flows are for smart phones but there is something for feature phones as well.
There are various ways UPI works on a feature phone: (1) IVR (interactive voice response) (2) By giving missed call to a specific number (3) Sound based (4) Mobile OEM implementation
If you are interested in knowing how UPI flow works on feature phone then do read about UPI 123Pay (Reference Link)
Now… let’s come to the hero topic: UPI Plug-in
UPI Plug-in allows a merchant to facilitate UPI transactions within its own App by integrating bank’s SDK. Considering transactions are happening within the merchant’s app (no redirection or App-to-App switch) so the transaction is done faster and also, the performance/success rate will be higher.
With UPI Plug-in, in a way, merchants will become ‘Partial-TPAP’.
Condition: A user has to create VPA (if she does not have VPA of the sponsor bank that is created on the sponsor bank’s UPI App).
- Merchant App can be used only for facilitating P2M transactions
- UPI ID/ VPA can be used on any merchant App
- Data Communication for transaction must happen between bank PSP and bank server
- Merchant SDK will not have access to customer sensitive data (personal info/data)
- Merchant is now allowed to share transaction data with 3rd parties without approval from the bank and NPCI
- Sponsor Bank (the one which is giving SDK to merchant) is responsible for (1) KYC and due diligence of merchant (2) Compliance including data localisation (3) fully liable to merchant’s actions and activities
All this is good… why merchants would want to do it? Will customers be okay to create new VPA on merchant’s App?
Usually merchants who are interested in FinTech/Payments play want to be a TPAP (Here is the list).
Also, merchants who have large customer base wants to be TPAP so that they can engage the customer’s beyond their core product/services.
Example: Recently Zomato became TPAP. That means, Zomato’s users not only can order food on the App but also do P2P transfer and pay on other merchants through Zomato App.
Every large merchant will not have that kind of plans and also do not want to invest (time, effort and money) in becoming TPAP but still want to provide better user experience and higher SRT… so for such merchants UPI Plug-in is a good option.
I am sure you will see this solution on different types of merchants — gaming, eCommerce, Digital lending etc.
Ending this article with the interesting thing I saw in a tea shop !!!
