Google Pay announces Tap to Pay for UPI in collaboration with Pine Labs: Here’s what it means

Google Pay has announced the launch of Tap to Pay for UPI (Unified Payments Interface) in collaboration with Pine labs. With this new feature, users can just tap their phone on the POS terminal and authenticate transactions on their phone using their UPI PIN. Pine Labs is a merchant commerce platform that provides payment solutions to merchants.
This new feature would mean that users no longer have to scan a QR code with their phone, which is slightly more time-consuming and can get inconvenient when the QR code is in a poorly-lit location. But the functionality will only be available when transacting with a merchant that uses a Pine Labs Android POS terminal.
According to Google Pay, this new functionality was initially piloted at Reliance Retail and is now available at other large merchants like Future Retail and Starbucks.
“Tap to Pay for UPI has profound implications for high traffic retail outlets, with queue management hassles poised to be greatly reduced, and taking digital payments at POS well beyond cards. We are very excited to bring this first-ever innovation to India, in collaboration with Pine Labs,” said Sajith Sivanandan, business head for Google Pay and Next Billion User initiatives, Google APAC, in a press statement.

On March 8, the Reserve Bank of India had launched UPI 123Pay, a service aimed at the more than 40 crore feature phone users in the country. UPI 123Pay is designed to be accessed through four options: through an application, through missed calls, through interactive voice responses and through proximity sounds-based payments.
Since the pilot launch of UPI in April 2016, more than 304 banks are live on the system and users have made over 4.5 billion transactions worth over 8.26 lakh crore rupees.
A report The Indian Express has noted that doing away with MDRs (merchant discount rates) on UPI transactions has taken away the incentive for banks and payment partners to invest in the infrastructure that could extend the current capacity of the UPI network. This could mean a rise in glitches and failure rates that could slow the growth of the network as it looks to cross the milestone of 5 billion payments.