How Safe Is UPI ATM For Cardless Cash Withdrawals? FAQs Answered

UPI ATM can be also seen as a positive step in preventing crimes such as card cloning/skimming, a type of financial fraud where devices are installed at ATMs or PoS terminals to siphon off money

The UPI ATM, which has been unveiled as a White Label ATM (WLA), allows customers to withdraw cash from the ATMs with just a click of your smartphone. 

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From now on you can withdraw money from ATMs without using your debit card. Hitachi Payment Services, with collaboration with the National Payments Corporation of India (NPCI), launched India’s first Unified Payments Interface (UPI)-based ATM at the Global Fintech Fest in Mumbai last week. The UPI ATM, which has been unveiled as a White Label ATM (WLA), allows customers to withdraw cash from the ATMs with just a click of your smartphone. The UPI ATMs can transform our access to withdraw money from conventional ATMs, as analysts have pointed out that UPI ATMs provide a more secure method in cash withdrawal as you don’t need a physical card.

How To Obtain Cash

All you need is an active UPI ID and a smartphone connected to the Internet. UPI, which serves as an Internet-based platform managed by the NPCI, facilitates instantaneous fund transfers to various bank accounts.

Is It Safe And Secured

The UPI ATM can be also seen as a positive step in preventing crimes such as card skimming, a type of financial fraud where devices are installed at ATMs or point-of-sales terminals to gather card information such as PIN and card number to siphon off money.

Hemant Sood, founder of Findoc, tells ABP Live that the NPCI and the UPI ATM have worked together to create a safe and secure alternative to traditional ATMs. "Customers may utilise their UPI accounts to conduct cardless cash withdrawals by scanning a QR code that is shown on the ATM screen. By removing the possibility of card skimming or theft, this ground-breaking technology gives users more protection. The UPI ATM also offers a familiar and user-friendly experience by seamlessly integrating UPI's convenience and security into conventional ATM services," Sood says.

Amit Gupta, managing director at SAG Infotech, says that UPI ATMs are the non-banking organisations that own and operate white label ATMs. "Customers of partnering banks may use their UPI accounts to withdraw cash without using an ATM or debit card. This novel approach is intended to enable instant access to cash even in distant parts of India without the use of a physical card," he says. 

What Are User Benefits

According to Sood, in particular, isolated locations will benefit from the UPI ATM's increased financial inclusion and accessibility. "It provides rapid and easy access to cash, even in places where actual cards might not be widely available. This is a noteworthy step because UPI processes a sizable amount of India's retail digital payment flow," he adds.

Amit Adesara, co-founder of Deseo Fintech, tells us that UPI ATMs offer a secure alternative to traditional ATMs due to their robust authentication, encryption, and vigilant monitoring mechanisms. Users authenticate themselves through mobile apps, requiring PIN and device verification. "End-to-end encryption protects sensitive financial data, making it difficult for cybercriminals to intercept or manipulate transactions. Banks and regulatory authorities monitor UPI transactions, preventing suspicious or fraudulent activities," he says.

Here's A Step-By-Step Guide

• In an UPI ATM, click on Cash Withdrawal or UPI Cash Withdrawal on the screen
• Now, you’ll need to enter the amount you wish to withdraw
• After that, you’ll see a single-use dynamic QR code on the screen
• Scan that code with any UPI app on your phone
• Authorise the transaction on the UPI app on your phone (the same way you use UPI apps to make payments)
• Once that is done, you will be able to withdraw the cash from the machine
  
  

Any Withdrawal Charge?

As of now no additional fee would be levied for UPI cash withdrawals at ATMs. According to PhonePe, users will not be charged any money to withdraw cash at a UPI ATM.

Sood opines that it is vital to keep in mind that each bank and financial institution may have its own regulations and fees for ATM transactions, even while the search results do not specifically include third-party charges during cash withdrawals through UPI ATMs. Adesara points out that UPI ATM withdrawals are typically free from additional fees or deductions beyond the withdrawn amount. "However, users should consult their bank or UPI service provider to understand any potential fees or terms and conditions," he says.