In order to enable automated payments through wearables, smart appliances, connected cars, and other devices, the NPC is creating a version of UPI that is ready for the Internet of Things (IoT).
As the National Payments Corporation of India (NPC) looks to develop a new system that would be able to conduct transactions across devices, the Unified Payments Interface (UPI) is set to receive a smart update. At the moment, only mobile phones are used to complete all UPI transactions.
However, according to Business Standard, the NPC is creating an Internet of Things (IoT)-ready version of UPI that would enable automatic payments via wearable technology, smart appliances, connected cars, and more.
This update would allow gadgets like washing machines, refrigerators, smartwatches, and even connected cars to start UPI payments automatically. For instance, you may pay parking costs straight from your vehicle and have your smart TV automatically renew your subscriptions without using a third-party UPI app.
According to the article, devices will be able to process payments using a different virtual payment address linked to the user’s primary UPI ID thanks to the planned capabilities. This makes it possible for smart devices to conduct embedded transactions using UPI Circle-powered delegated payments.
Although they function differently, giving a transaction mandate to a human and a device is essentially the same. Since gadgets would have unique IDs, this feature is more nuanced than others, according to the report, which cited people with knowledge of the situation.
A new feature that enables devices to perform UPI transactions on their own when a user-issued mandate is activated is part of NPCI’s yearly innovation pipeline.
One-time password authentication might be necessary for onboarding. According to a source, safe testing is ensured by utilizing already assigned cash. In addition to giving the device an extra UPI ID, UPI Circle will allow users to authorize payments to secondary users with predetermined restrictions.
By removing the need for new commands every time, this feature securely processes payments by supporting delegated payments and AutoPay for recurring transactions.
Subject to regulatory clearances, NPCI intends to launch this IoT-ready UPI at the 2025 Global Fintech Fest. NPCI launched a number of services in 2023, including as offline payment credit lines on UPI and UPI Lite X.
With 18.4 billion transactions made through UPI in June, NPCI wants to increase UPI tenfold from its current size.
