United Payments Interface (UPI) has become one of the leading methods of payment in India. Launched in 2016, the system powers multiple banks accounts into a single mobile application. It facilitates the transfer of money and online payments. The UPI comes under the aegis of the National Payments Corporation of India (NPCI).
In the latest feature addition, NPCI has unveiled withdrawal of cash from any bank ATM using just UPI. Using this new feature called Interoperable Cardless Cash Withdrawal (ICCW), customers will be saved the trouble of carrying their cards or remembering their ATM PINs.
The Reserve Bank of India has directed banks to provide this ICCW option at ATMs in a bid to prevent card-related frauds such as cloning, skimming and device tampering. At the moment, the cardless cash withdrawal facility is only available at a few banks at ATMs operated by those particular banks themselves (known as an on-us basis). With the introduction of the new guidelines, customers will now be able to withdraw from any bank’s ATM, not just their own.
How will Cash Withdrawals via UPI work?
Some scenarios of how card-less, UPI enabled ATM withdrawals could take place.
- Customer enters details of request on ATM terminal
- ATM generates QR code
- The customer scans the QR code using the UPI app and approves the request
- ATM dispenses the cash
Option 2: Touchscreen ATMs
- The user gets a request on a UPI cell phone app, approves the transaction using the existing UPI app password
- Post successful authentication, cash is dispensed at the ATM
How to Withdraw Cash from the ATM?
Here are the steps to withdraw money from the ATM using UPI:
- Visit the ATM of any bank and select the ‘Withdraw Cash’ option on the screen.
- Now, select the ‘UPI’ option.
- You will see a QR code displayed on the screen.
- Open the UPI-based app on your mobile phone (e.g. Google Pay, PhonePe).
- Open the QR code scanner option on your UPI-based mobile app.
- Scan the QR code shown on the screen of the ATM machine.
- You will now be able to withdraw cash (up to Rs. 5,000).
- Enter your UPI PIN.
- Tap the ‘Hit Proceed’ button.
- You will get your cash from the ATM machine.
Which banks provide the option of Cardless Cash Withdrawals?
Currently, only a few banks provide cardless cash withdrawal using ATMs. Only a select few banks provide this option, including Punjab National Bank (PNB), HDFC Bank, ICICI Bank, and State Bank of India (SBI).
Will Debit Cards eventually be unneeded?
Users will accept cashless ATM withdrawals, and we anticipate steady usage and growth of debit cards. Debit cards are unlikely to become obsolete since they may be used for a variety of purposes outside ATM withdrawals, such as facilitating international transactions and enabling ATM cash withdrawals even when a person’s phone is off or in an area with inadequate mobile internet coverage.
What does it mean for clients when they withdraw Cash without a Card?
Banks will need to spend on upgrading ATM software and creating other payments infrastructure, which could potentially lead to additional fees being levied on customers.
Any Additional Charges
There’s good news here. There will be no additional charges for cardless cash withdrawal from ATMs using UPI. As per the RBI, “The on-us/off-us ICCW transactions shall be processed without levy of charges other than those prescribed (on Interchange Fee and Customer Charges).”
The charges for use of another bank’s ATM to withdraw cash via this cashless withdrawal method will remain the same as current card withdrawal charges. Since Jan 1, 2022, customers are allowed five free transactions every month at their own bank’s ATM. For the use of other banks’ ATMs, customers are allowed three free withdrawals in metro cities and five in non-metros. Subsequently, customers are charged Rs. 21 per transaction.