Context: NPCI has introduced a new feature in UPI Payments – UPI Tap and Pay. It will aid the objective to achieve offline payments using UPI architecture. 

About Tap and Pay

• It uses NFC to capture the payee’s UPI ID/VPA to make the payments through UPI 

• Once the UPI ID is captured, payment can be made using UPI PIN or UPI Lite. 

Features of UPI tap and pay

• It utilizes near-field communication (NFC) technology to capture a payee’s UPI ID or Virtual Payment Address (VPA), eliminating the need for a camera.

• The feature can only be accessed on phones or devices with NFC capability.

• Users need to locate the ‘Tap & Pay’ button on their UPI app, and the transaction is completed by tapping the device on the UPI Smart Tag/Smart QR.

• Transactions up to Rs 500 are processed through UPI LITE, while those exceeding Rs 500 require a UPI PIN.

What is Near Field Communication (NFC)

• It is a short-range wireless connectivity technology that allows devices in proximity to communicate with each other. 

• Uses: It allows quick exchange of information with a single touch, to pay, exchange information like contact cards and share documents. 

• Technology: It uses electromagnetic radio fields, to enable communication. 

• Hardware Based: This technology requires a chip in both the devices to enable NFC communication. 

What is Unified Payments Interface (UPI)?

• It is a payment system that was launched by National Payments Corporation of India (NPCI) in 2016. 

• It allows round the clock money transfer between two bank accounts without knowing the account details. 

• It requires all the customers to register with NPCI through a virtual payment address called UPI ID. 

• This has increased the digitalisation of payments and allows the customer to pay directly to the bank account of the merchant, without going through a wallet.