SEBI Opens Doors & Extends UPI Implementation

Imagine that you are driving on the Expressway from Mumbai to Pune and you suddenly get a call from an old broker friend about a great momentum trading idea. As he explains the rationale, you quickly calculate that the stock could outperform in the short term. But there is a problem! Your trading account is not funded and you need to transfer funds into your trading bank account from a different bank account. In your hurry in the morning you left your folder with all the bank details at home, so you are not sure how you are going to transfer funds online. Does that mean you will miss out on this buying opportunity? Well, if you are a customer of Angel One then you need not miss this opportunity. Welcome to the world of UPI-enabled investing.

So, what exactly is UPI and what is UPI-enabled investing?

Unified Payment Interface (UPI is a payment system that allows money transfer between any two banks by just using your smart phone. UPI allows a customer to directly pay from his/her bank account without the hassles of typing the card number, account number, IFSC Code, net banking passwords, MICR number etc. The UPI typically powers multiple bank accounts into a single smart mobile application. So how exactly does UPI function?

In UPI transfer, you do not need to know the other person’s bank account number or their IFSC code. You just need to know their Virtual Payment Address (VPA). The VPA is a unique id that is assigned to each smart phone app download. You can just enter the other party’s VPA code, input your secret MPIN consisting of 6 digits and transfer the funds. VPA accounts are simple addresses. For example Rajiv Khanna’s UPI-VPA at ICICI Bank could be something as simple as Rajivk@yesbank You can transfer funds just based on this unique VPA id. More importantly, the transfer is instantaneous, unlike the normal NEFT transfers which take 2-3 hours for the credit to reflect.

UPI-enabled investing is all about letting investors load their trading accounts using UPI interface. Angel One has become the pioneer by being the first to introduce UPI-enabled investing in the capital markets in India.

SEBI opens the doors for UPI; Angel One shows the way…

SEBI, in its first board meeting, under the stewardship of Mr. Ajay Tyagi had taken the big step of permitting mutual fund investments and mutual fund redemptions using the UPI interface / e-wallets. This was a small step to open the doors of mutual fund investments to the vast masses in semi-urban and rural areas.

Angel One has now made this facility available to all its 1 million trading clients on its broking platform. This will give all the registered clients of Angel One a seamless access to link their bank accounts and their trading accounts without going through the hassles of remembering 16-digit debit card numbers, 14 digit account numbers and 11-digit IFSC codes. All that they need to remember is the VPA and the MPIN. For trading clients of Angel, this will be a huge leap as they can now transfer instantly across 46 banks to which Angel has currently provided access. More importantly, this UPI interface integrates seamlessly with the trading application of Angel and hence all updates to trading limits will also be on a real time basis.

Empowering customers with funds at their fingertips…

Today investors miss out on good trading ideas because they are not able to transfer funds on time due to logistical constraints. Angel’s UPI interface will largely help overcome that problem. The app is already available on India’s most popular mobile operating system, Google Android, and will be soon available on the Apple IOS also. Despite the upper limit of Rs.100,000 for UPI transfers per day, this application launched by Angel will be a big boon for small and medium sized traders and investors for whom simplicity, convenience and speed matters a lot!

Getting future ready post demonetization…

The demonetization drive announced by the Honourable Prime Minister on 08^th November 2016 was a game changer for two reasons. Firstly, it institutionalized the government relentless battle against black money and ensured that a lot of good money came into the capital markets. Secondly, it pushed Indian banks and financial services companies to rapidly innovate and transform themselves into digital businesses.

The shift to digitization of stock broking is inevitable and will happen much sooner than most people are willing to anticipate. The future of the broking industry will be in the hands of brokers who can think digitally, execute digitally, deliver digitally and service digitally. By pioneering the UPI interface for capital markets, Angel has taken the lead and shown the way. It is obviously a precursor of many more such innovations to come!