In a historic move that is set to redefine the way Indians access cash, Hitachi Payment Services, in collaboration with the National Payments Corporation of India (NPCI), launched India's pioneering UPI-ATM during the prestigious Global Fintech Fest held in Mumbai on September 5. This innovative development brings a secure cardless cash withdrawal system to the forefront of modern banking. Here's an in-depth look at this groundbreaking advancement:
What is UPI-ATM?
The UPI-ATM, a revolutionary white label ATM, is designed to facilitate cardless cash withdrawals, eliminating the need for physical ATM or debit cards. White label ATMs, distinctively owned and operated by non-bank entities, are at the heart of this transformative financial innovation.
How the UPI-ATM Operates?
Operating the UPI-ATM is a streamlined process. Customers of participating banks select the 'UPI cash withdrawal' option on the ATM, proceeding to choose their desired withdrawal amount. Subsequently, a single-use dynamic QR code appears on the ATM screen.
To complete the transaction, customers scan this QR code using any UPI mobile application and authenticate it by entering their PIN. After validation, the ATM dispenses the requested cash, making the process efficient and secure.
Key Features of the UPI-ATM Service
This groundbreaking service offers the following key features:
- Interoperability: The UPI-ATM provides an interoperable, cardless transaction facility.
- Transaction Limit: Users can withdraw up to Rs 10,000 per transaction, adhering to the existing daily UPI limit and the issuer bank's UPI-ATM transaction limit.
- Convenience: Carrying physical cards for ATM cash withdrawals is no longer necessary, and individuals can withdraw cash from multiple accounts through the UPI app.
Distinguishing UPI-ATM from Cardless Cash Withdrawals
While several banks offer cardless cash withdrawals based on mobile and OTP verification, the UPI-ATM distinguishes itself by relying on QR codes for cash transactions, as noted by Sumil Vikamsey, Managing Director of Cash Business at Hitachi Payment Services, a subsidiary of Hitachi.
NPCI lauded the launch of the UPI-ATM, calling it a "significant milestone in banking services" that seamlessly integrates the convenience and security of UPI into traditional ATMs.
Prominent figures in the financial world have responded enthusiastically to the UPI-ATM's introduction. Anand Mahindra, Chairman of the Mahindra Group, shared a video showcasing the UPI-ATM's functionality, expressing awe at India's rapid digitization of financial services, which leans toward consumer-centricity. Mahindra also playfully remarked on the need to safeguard his cellphone in this evolving landscape.
This UPI ATM was apparently unveiled at the Global Fintech Fest 2023 in Mumbai on September 5. The speed at which India is digitising financial services & making them consumer-centric as opposed to corporate-centric (Alarm bell for credit card companies?) is simply dazzling.… pic.twitter.com/krBXhbc9Qh— anand mahindra (@anandmahindra) September 7, 2023
Praveena Rai, Chief Operating Officer of NPCI, highlighted the UPI-ATM's potential to reimagine ATMs, transforming the ATM experience in terms of cost, accessibility, and reach. She also applauded the positive reviews the UPI-ATM received at the Global Fintech Fest in Mumbai.
The introduction of the UPI-ATM marks a significant leap forward in the evolution of banking services in India, promising unparalleled convenience and security for cash withdrawals while heralding a new era in digital financial innovation.