NPCI Set to Introduce UPI for Secondary Market Trading Starting January 1

Get ready, investors! India's digital payment revolution is reaching the stock market as the National Payments Corporation of India (NPCI) gears up to launch "UPI for secondary market" on January 1st, 2024. This game-changer promises a simpler, faster, and more secure way to purchase equities through the ubiquitous Unified Payments Interface (UPI).

Modernizing Stock Trading with UPI

In its beta phase targeting the equity cash segment, this digital payment avenue is primed to transform trading in the stock market by enabling the blocking of specific amounts for multiple debit transactions.

UPI's Impact on Financial Landscape

Unified Payments Interface (UPI), already a prominent digital payment method, now leads as the preferred mode for IPO applications, capturing approximately two-thirds of the market share.

Expanding on Key Details:

NPCI's UPI offering for the secondary market, akin to the existing ASBA facility, has received the green light from market regulator Securities and Exchange Board of India SEBI and banking overseer Reserve Bank of India (RBI). ASBA's success in reducing the gap between issue closure and share listing remains an influential factor in its adoption.

Collaborative Efforts and Pilot Phase

National Payments Corporation of India NPCI's launch garners substantial support from integral stakeholders, including clearing corporations, stock exchanges, depositories, stockbrokers, banks, and UPI app providers. In the beta phase, a limited set of pilot customers will have access to this innovative digital payment system.

Operational Mechanics and Swift Settlement

During this pilot phase, investors can reserve funds in their bank accounts, with deductions only occurring upon trade confirmation during settlement. The clearing corporations will streamline client payouts on a T+1 settlement basis, ensuring speedy completion of transactions within a day.

Participant Details and Expansion Plans

The beta launch will be facilitated through the Groww trading app while being supported by NPCI's BHIM app and YES PAY NEXT as UPI app platforms. This service is accessible for HDFC Bank and ICICI Bank customers, with banks like HDFC Bank, HSBC, ICICI Bank, and Yes Bank acting as sponsor banks.

Stockbroker Zerodha, alongside banks like Axis Bank and Yes Bank, and UPI-enabled apps such as Paytm and PhonePe, are in the certification phase and geared up to partake in the beta launch, as indicated by NPCI.

A New Era Begins: Embrace the Future of Stock Trading

The launch of UPI for secondary market marks a significant milestone in India's financial journey. It not only promises a more convenient and secure trading experience for investors but also lays the groundwork for a vibrant and inclusive stock market ecosystem. As the pilot phase kicks off in January, the countdown begins for a revolution that will change the way we invest in India, one seamless click at a time.