Consumers will soon be able to use the Unified Payments Interface (UPI) for cash withdrawals, apart from merchant payments and interpersonal transactions.
Public sector lender Bank of India has already introduced this facility for its own customers, in partnership with Mumbai-based payments company AGS Transact Technologies.
Further, the National Payments Corporation of India (NPCI), which manages both the UPI and ATM railroads, has already created a committee to review the interoperability guidelines to open the feature for other bank customers as well, said bankers in the know of the matter.
“We have worked with Bank of India to enable these services in their ATMs and they are rolling it out across all their ATMs within the next three to six months,” said Ravi Goyal, managing director, AGS Transact Technologies. “We are in discussions with other banks as well.”
NPCI did not respond to email queries till the time of going to press.
Bank of India confirmed the development and added that it is in the process of obtaining security and technical clearance from its ATM manufacturers and will first deploy it in all cash recyclers followed by ATMs in general.
As of now, only the bank’s own customers are able to use this feature, but once interoperability is opened up, other bank customers can avail of the service. Interoperability allows customers to use any bank ATM to withdraw money.
“NPCI is currently reviewing the system and could open up interoperability very soon, thereby opening new use case for UPI,” said the banker quoted above.
Card-less ATM transactions is not new, as many banks allow customers to use the Aadhaar number as an identifier to allow cash withdrawals through ATMs, but that was complicated, the banker added.
“The UPI-based cash withdrawal service has an easy step-by-step process, the customer can initiate the cash-out through QR code instructions on the terminal, following which a dynamic QR code is flashed, which needs to scanned by the UPI app the customer chooses to use,” said Goyal.
This process can prevent skimming and card cloning, where fraudsters clone ATM cards of customers when they swipe their cards at a compromised terminal.
On Monday, around 22 people lost Rs 5 lakh in an ATM fraud in Kolkata.
ATM deployers have been facing a slowdown as banks have drastically cut down on installing these machines across the country.
Most of the new orders from banks are for replacements rather than new deployments. ATM deployers are also looking at innovative ways to keep the terminals advanced and make the process more secure.