India’s UPI Revolution Reaches Stocks: Beta Launch of ‘UPI for Secondary Market’ Announced

The National Payments Corporation of India (NPCI) has announced the beta launch of the ‘UPI for Secondary Market’ slated for January 1, 2024. This innovative step marks a significant milestone in the integration of digital payments into the Indian equity market.

Key Features and Benefits

  1. Pilot Phase and Customer Participation: Initially, the service will be available to a select group of pilot customers. Investors during this phase can block funds in their bank accounts, which will only be debited upon trade confirmation during settlement by Clearing Corporations.
  2. Settlement Process: Clearing Corporations are responsible for processing payouts to clients on a T+1 basis, ensuring swift settlement of trades within one day of transaction completion.
  3. Collaborative Effort with Major Stakeholders: The launch is supported by key stakeholders, including clearing corporations, stock exchanges, depositories, stockbrokers, banks, and UPI app providers. This broad-based support is essential for the seamless integration of the system into the existing market infrastructure.

Access and Functionality

  • Participating Platforms: The beta phase can be accessed through the trading app Groww, with NPCI’s BHIM app, Groww, and YES PAY NEXT as UPI apps. HDFC Bank and ICICI Bank customers will be the first to avail of this facility.
  • Sponsor Banks: HDFC Bank, HSBC, ICICI Bank, and Yes Bank are acting as sponsor banks for clearing corporations and exchanges.
  • Future Expansion Plans: Stockbroker Zerodha and customer banks like Axis Bank are currently in the certification stage and will join the beta launch soon. UPI-enabled apps like Paytm and PhonePe are also preparing to participate.

The Implication of This Launch

This initiative is a significant step forward in enhancing the efficiency of the equity market in India. The integration of UPI, a widely accepted digital payment system, into the secondary market is expected to streamline processes and increase accessibility for investors. This move is in line with NPCI’s ongoing efforts to expand the scope and reach of digital payments in India.

Looking Ahead

As this new system takes shape, its success will largely depend on the seamless collaboration between various stakeholders and the adaptability of the market participants. The beta phase will be a critical period for assessing the functionality and impact of this new initiative on the equity market ecosystem.



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