Using an ATM card to withdraw money from machines may soon become outdated.
Instead, people will be able to withdraw cash through their smartphones using the Unified Payments Interface (UPI).
Currently, UPI is widely used for sending money, paying bills, and online shopping.
Soon, it may also allow users to withdraw cash directly.
The government is working on expanding UPI’s features to include cash withdrawals.
At present, this service is only available at a few UPI-enabled ATMs and through limited shopkeepers.
These shopkeepers can allow withdrawals of up to ₹1,000 in cities and ₹2,000 in villages.
Now, the goal is to extend this service to over 20 lakh Business Correspondents (BCs) across the country.
BCs include NGOs, shopkeepers, and individuals who provide banking services in remote areas.
They will soon have QR codes, which users can scan with their UPI apps to withdraw cash easily.
How the System Will Work
Business Correspondents act like mini bank branches, especially in rural or less-connected regions.
The new UPI cash withdrawal system will work like this:
A customer visits a BC outlet.
The BC shows a QR code.
The customer scans the QR code using a UPI app and enters the amount.
The money is debited from the customer’s bank account and credited to the BC’s account.
The BC then gives the customer the equivalent amount in cash.
This system is still under development.
The National Payments Corporation of India (NPCI), which launched UPI in 2016, has asked the Reserve Bank of India (RBI) for permission to roll it out.
Currently, BCs can use micro-ATMs to allow card-based cash withdrawals.
Another existing method uses the Aadhaar card. In that system, the customer’s fingerprint is scanned and matched with Aadhaar data.
Once verified, money can be withdrawn.
However, this method doesn’t work well for people with unclear fingerprints.
Who Will Benefit?
This new QR code-based cash withdrawal method will especially help:
People who struggle to use ATM cards.
Those whose fingerprints are hard to scan.
Residents in remote areas with limited ATM access.
While this service will expand access to cash, ATMs will still be useful, especially since they hold more cash and are available 24/7.
