New UPI feature: Deposit cash at ATMs without a debit card; steps to use UPI interoperable cash deposit

The Reserve Bank of India and NPCI have been trying to improve and update the Unified Payment Interface (UPI) to the newest technology available. In a recent move, customers now have the convenience of utilising their UPI app to deposit cash at their bank ATMs, eliminating the necessity for debit cards or physical cards. The UPI Interoperable Cash Deposit (UPI-ICD) feature was introduced by T Rabi Shankar, the deputy governor of the Reserve Bank of India, during the Global Fintech Fest (GFF) 2024 held in Mumbai, Maharashtra, on Thursday, August 29.

The UPI-ICD functionality offers users the ability to make cardless cash deposits through UPI services. However, this feature is currently exclusive to ATMs capable of both cash deposits and withdrawals (cash-recycler machines). It is worth noting that cardless cash withdrawals through UPI were initially made available in 2023. 

As per NPCI, UPI-ICD uses a customer’s mobile number linked to UPI, virtual payment addresses (VPA), and account IFSCs, allowing them to deposit cash either in their own account or any other bank account.

Here are the top points:

What is UPI-ICD?

UPI-ICD, or Unified Payments Interface Interoperable Cash Deposit, is a service designed to enable users to deposit cash to their accounts via ATMs without the necessity of a physical card. This service operates solely based on a user's mobile number linked to UPI, virtual payment address, and account IFSC. The introduction of this service will be gradually implemented nationwide, enhancing accessibility and convenience in cash deposits for users.

How will UPI-ICD work?

As per NPCI, the Unified Payments Interface Interoperable Cash Deposit (UPI ICD) service will enable customers to conveniently deposit cash at Automatic Teller Machines (ATMs) maintained by banks and white label ATM operators (WLAOs) by utilising UPI to transfer funds into their own bank account or any other bank account without the requirement of a physical debit/credit card. The NPCI stated that these ATMs are equipped with cash recycler technology, allowing users to both deposit and withdraw cash seamlessly.

"The introduction of UPI ICD allows customers to deposit cash at ATMs operated by banks and white label ATM operators (WLAOs) using UPI to their bank account or any other bank account without the need for a physical card. These ATMs are cash recycler machines which are used for both cash deposits and withdrawals. Leveraging their mobile numbers linked to UPI, virtual payment addresses (VPA) and account IFSCs, customers can now do cash deposits, making the process more seamless, inclusive and accessible," NPCI said in a statement.

Steps to follow to use UPI-ICD

UPI-Instant Cash Deposit (ICD) facility will serves as a convenient solution for customers to securely deposit cash into their own or any other bank account through designated ATMs. 

These ATMs, referred to as Cash Deposit Machines (CDMs), will be capable of managing both cash deposits and withdrawals efficiently.

By leveraging their linked mobile number with UPI, virtual payment addresses (VPA), and account IFSCs, customers can effortlessly initiate cash deposits directly into their accounts. 

This streamlined procedure obviates the necessity for a physical debit card, enhancing the convenience and accessibility of cash transactions at ATMs.

According to experts, UPI cardless cash deposit might mirror the convenience and simplicity of UPI cardless cash withdrawals. Currently, cash deposits at automated teller machines or designated bank machines typically require the use of a debit card. 

However, the introduction of UPI cardless cash deposit eliminates the necessity of carrying a physical debit card to facilitate cash deposits at ATMs. This advancement in banking technology is projected to streamline the cash deposit process and enhance user convenience significantly.

“The enablement of UPI for cash deposit facility is another remarkable use-case of UPI. Currently, to access the cash deposit facility, the user must insert his/her debit card, enter the PIN and select “deposit” to complete the cash deposition process at the ATM or CDM. Going ahead, this will be a card-less process, all that the user will need, is UPI enabled on that bank account. This will make the banking transaction-CDM as easy as making payments via UPI," said Mandar Agashe, Founder & MD, Sarvatra Technologies Pvt Ltd.