SUMMARY
The cardless withdrawal facility would not require customers to use debit or credit cards while withdrawing cash from ATMs
The move will add customers’ convenience and reduce fraudulent activities. As of now, fewer banks are allowed to offer cardless cash withdrawal via ATMs by the RBI
UPI clocked 5.04 Bn transactions in March 2022; the move is likely to grow the number manifold
Reserve Bank of India (RBI) has today introduced interoperable cardless withdrawal at ATMs using the UPI platforms. While addressing a monetary policy press conference, T Rabi Sankar, deputy governor of RBI, said that the cardless cash withdrawal can be done from any bank’s ATM, third-party ATM or White Label ATM.
RBI Governor Shaktikanta Das, said, “We will not stop issuing credit or debit cards as they have many other utilities. They are not just used for cash withdrawals, they can be utilised while at a restaurant, shop, or for payments in a foreign country. So credit and debit cards will continue.”
The RBI will soon be issuing guidelines to National Payments Corporation of India (NPCI), ATM networks and banks to initiate the service. The cardless withdrawal facility would not require customers to use debit or credit cards while withdrawing cash from ATMs.
The move will add customers’ convenience and reduce fraudulent activities. As of now, fewer banks are allowed to offer cardless cash withdrawal via ATMs by the RBI.
While visiting the UPI-enabled ATMs, UPI users can withdraw cash through UPI apps such as Paytm, Amazon Pay and GPay. The users will not have to swipe cards in such ATMs as they can simply scan the QR code on the ATM’s screen and command cash withdrawal via the UPI app.
The Success Story Of India’s UPI
Being a successful real-time payments system in the world, UPI offers simplicity, safety, and security to P2P and P2M transactions in India. This year, UPI will start its operations in Nepal as the country seeks to digitise cash transactions and attain objectives of its government and central bank.
Testament to its success, UPI clocked 5.04 Bn transactions in March 2022. In 2021, UPI enabled 39 Bn financial transactions amounting to business worth $940 Bn, which is equivalent to around 31% of India’s GDP.
In December 2021, RBI introduced UPI payment services for feature phone users in a bid to promote digitisation in the country. The RBI launched UPI on feature phones, called UPI123Pay, on 8th March, which will allow the feature phone users to make UPI transactions without needing an internet connection.
To promote the usage of homegrown modes of digital payments, the Cabinet also approved an INR 1,300 Cr scheme in December 2021 to incentivise small merchants’ MDR – charges levied on accepting transactions through low-value UPI transactions.
