NPCI Explained: Objectives, Key Functions, And Popular Payment Systems

Today, many individuals in India use digital payment methods for everyday transactions. Whether it is transferring funds through UPI, paying bills, or withdrawing cash, digital payments have become widely adopted across the country.

However, operating many of these retail payment systems requires a central organisation. The National Payments Corporation of India (NPCI) performs this role by developing and managing several of India’s retail payment platforms.

This article explains what NPCI is, its objectives, key functions, popular NPCI payment systems, information on the promoter banks that supported NPCI’s formation, and how these systems are used.

Table of contents

• What is NPCI
• Objectives of NPCI
• Key functions of NPCI
• Popular NPCI payment systems
• How do I check my Aadhaar–NPCI link status?
• How to use NPCI services?

What is NPCI

Before NPCI was established, India’s retail payment ecosystem was served by multiple independent systems, which often made transactions less uniform and sometimes inefficient. To strengthen this area, the Reserve Bank of India (RBI) and the Indian Banks’ Association (IBA) created NPCI in 2008 as an umbrella organisation for retail payments and settlement systems in India.

Objectives of NPCI

NPCI has been established as a not-for-profit organisation under Section 25 of the Companies Act, 1956 (now Section 8 of the Companies Act, 2013). Its objective is to provide reliable and scalable infrastructure for payment and settlement systems across the Indian banking sector.

NPCI also works towards enhancing efficiency in retail payments and expanding the availability and reach of digital payment solutions across India.

Key functions of NPCI

Building a robust payment infrastructure

NPCI develops and maintains systems that support efficient, protected and scalable retail payments across India.

Promoting financial inclusion

It works to expand access to digital payments, making them more accessible and usable for individuals across different regions and segments.

Encouraging a less-cash economy

NPCI supports India’s shift towards a less-cash economy through adoption of digital payment platforms and awareness initiatives.

Fostering innovation in digital payments

It introduces and upgrades payment technologies to address the evolving needs of consumers, businesses and financial institutions.

Facilitating inter-bank settlements

NPCI helps support timely and accurate settlements between participating banks for transactions processed through NPCI-operated systems.

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Popular NPCI payment systems

Unified payments interface (UPI)

UPI is an instant retail payment system that allows fund transfers between bank accounts through mobile applications. It uses identifiers such as a mobile number or a virtual payment address, reducing the need to share account details.

UPI Lite

UPI Lite is designed for small-value transactions. It enables payments up to Rs. 500 per transaction from an on-device balance, with an overall limit as permitted by NPCI guidelines. Transactions may be completed without entering a UPI PIN for each payment.

RuPay

RuPay is India’s domestic card payment network. RuPay cards are issued by banks in India and may be used for ATM withdrawals, online transactions and purchases at merchant outlets. International usage is enabled through partner networks, subject to acceptance.

BHIM (Bharat Interface for Money)

BHIM is a mobile application developed by NPCI to provide a simple interface for UPI payments. It allows fund transfers, bill payments and QR-based payments directly from a linked bank account.

National automated clearing house (NACH)

NACH is used for bulk and repetitive payments such as salaries, pensions and government subsidies. It helps institutions and banks process large volumes of transactions in a structured and timely manner.

Aadhaar enabled payment system (AePS)

AePS enables basic banking services through Aadhaar-based authentication at designated outlets such as micro-ATMs operated by participating banks. Services include cash withdrawal, cash deposit, balance enquiry and fund transfer, subject to the bank’s participation.

Bharat BillPay

Bharat BillPay is an integrated platform for recurring bill payments such as electricity, water and telecom. Users may make payments through participating banks, authorised agents or digital channels. The system provides structured bill payment processing and instant confirmation.

Immediate payment service (IMPS)

IMPS allows instant fund transfers between bank accounts at any time, including on holidays, through participating banks.

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How do I check my Aadhaar–NPCI link status?

UIDAI website

Visit the UIDAI “Aadhaar–bank account linking status” page.
Enter your Aadhaar number and the OTP received on your registered mobile number.
The portal will display the bank account currently mapped on the NPCI system.

mAadhaar app

Log in using your Aadhaar-linked mobile number.
Go to the services section and select bank account linking status.
The app will show the latest bank mapped to NPCI.

Your bank branch

You may request the branch to confirm whether your account is updated on the NPCI mapper.
Banks may also provide this information through net banking or mobile banking, depending on the institution.

How to use NPCI services?

Using UPI

To use UPI, download a UPI-enabled application provided by your bank or a third-party app provider. Register using the mobile number linked to your bank account and set a UPI PIN. Once registration is completed, payments and fund transfers may be made through the app.

Using RuPay cards

RuPay debit or credit cards issued by banks work across ATMs, online platforms and merchant outlets in India. International usage is available where NPCI’s partner networks support acceptance.

Using BBPS

Bill payments may be made through internet banking, mobile banking applications or authorised Bharat BillPay outlets. Bills are processed through the system and confirmation is provided upon completion.

Using FASTag

For NETC FASTag, a FASTag issued by a participating bank must be affixed to the vehicle and linked to the bank account or prepaid wallet. Toll payments are deducted automatically through the NETC system when passing through participating toll plazas.

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Conclusion

NPCI plays an important role in developing India’s retail payment infrastructure and supporting the shift towards digital transactions. Its platforms, from UPI and RuPay to NACH and AePS, support a wide range of daily payment activities. You may explore these services through your bank or authorised digital channels based on your requirements.

FAQ

What is the National Payments Corporation of India (NPCI)?

NPCI is an organisation created by the Reserve Bank of India and the Indian Banks’ Association to develop and operate retail payment and settlement systems in India.

What are the key functions of NPCI?

NPCI develops and manages several retail digital payment systems, supports inter-bank clearing and settlement, enhances transaction protection and contributes to financial inclusion by expanding access to digital payment tools.

Which payment systems are developed and managed by NPCI?

UPI, RuPay, Bharat BillPay, NACH, IMPS and the National Electronic Toll Collection (NETC) system are among the major platforms developed and managed by NPCI.

How does NPCI contribute to financial inclusion in India?

NPCI expands access to digital payment systems, supports Aadhaar-based transactions and provides platforms that enable individuals across different regions to use formal financial services.