UPI - Unified Payments Interface


UPI (Unified Payments Interface) application is a payment system that allows you to transfer money between any two parties. UPI Application allows customer to instantly transfer money to someone else using the IMPS payment framework, without having to know their bank account number or IFSC code.

What is UPI Transaction

Unified Payments Interface (UPI) is a payment system that allows users to link more than one bank account in a single smartphone app and make fund transfers without having to provide IFSC Code or account number.

This is a real-time payment system where funds are credited instantly on a real-time basis.

How Does UPI Work

The user will only have to use a virtual address, known as a Virtual Payment Address (VPA) to carry out any transaction. UPI has been developed by the National Payments Corporation of India (NPCI) and is regulated by the Reserve Bank of India (RBI). UPI is slowly becoming the most preferred form of digital payment. The below-mentioned things are required to transfer funds via UPI:

  • A smartphone
  • An active bank account
  • The mobile number must be active and linked to the bank account
  • Internet connection

UPI is slowly becoming the most preferred form of digital payment. The UPI interface is compatible with most banks and many digital wallets, and payment applications are embracing UPI. Some of the apps include Google Tez, Paytm, PhonePe and the like.

Participants in UPI:

1.     Remitter bank

2.     Beneficiary bank

3.     NPCI

4.     Merchants

5.     Bank account holder

6.     Payer PSP

7.     Payee PSP

 UPI - Benefits to the Ecosystem participants

Benefits of UPI for Banks:

  • There is a universal application for one transaction
  • This is a single click Two Factor authentication
  • It is safer and more secure
  • It enables easy transactions
  • Unique Identifier
  • Payment basis Single

Benefits of UPI for Merchants:

  • Easier fund collection
  • There is no risk of storing the customer's virtual address
  • This is suitable for e-Com and m-Com transaction
  • Tap customers do not need credit/debit cards
  • In-App Payments (IAP)
  • It resolves the hassle of cash on delivery

Benefits for UPI for Customers:

  • It is a single application for accessing various bank accounts
  • There is round the clock availability
  • You can easily raise a complaint from the mobile app directly
  • The use of Virtual ID is secure

 

Registration in UPI enabled application

Steps to Register:

  • You need to download the UPI app from the App Store.
  • You can also create your profile by typing in details like your virtual id (payment address), name, and password.
  • You can go to 'Add/Link/Manage Bank Account' option and then link the bank and account number with the virtual ID.

Generating UPI - PIN:

  • You can select the bank account from which you want to initiate the payment, and follow with any of these options:

 

Generate and Change M-PIN

  • You will get an OTP from the bank on your registered mobile number
  • You can enter last 6 digits of your debit card number and the expiry date
  • You should enter the OTP and your preferred numeric UPI PIN and click 'Submit'
  • Once you click Submit, you will get a notification
  • You should enter your old UPI PIN and new UPI PIN and click 'Submit'

What Makes Unified Payments Interface Unique

These features make UPI a very unique platform:

  • There is just one singe mobile app to access various bank accounts.
  • It facilitates the Immediate transfer of money via mobile devices 24*7.
  • The virtual address of the customer for any kind of 'Pull & Push' offers security. The customer does not have to enter information like card number, IFSC code or account number.
  • With one click, there is a two-factor Authentication - Aligned with the Regulatory guidelines, and also provides a seamless single click payment.
  • Negates the hassle of cash on delivery, or even going to an ATM.
  • You can easily share your bills with friends.
  • Over the Counter Payments, Barcode (Scan and Pay) based payments, and Utility Bill Payments can be made.
  • You can make merchant payment with a single app or in-app payments.
  • You can raise complaints directly from the mobile app.
  • You can make donations, disbursements, and collections easily.

Performing a UPI Transaction

PUSH

This is when you send money using a virtual address:

  • You should log into the UPI application
  • Once you login, you can select 'Send Money/Payment'
  • Key in the beneficiary's/payee virtual id, account to be debited, and amount
  • You will see a confirmation on the screen
  • Enter the UPI PIN
  • You will get a message on the same.

PULL

This is when you request money:

  • You should log into the UPI application
  • Once you login, you can select 'Request Money/Payment'
  • Key in the beneficiary's/payee virtual id, account to be credited, and amount
  • You will see a confirmation on the screen
  • Enter the UPI PIN
  • You will get a message on the same.
  • The payer will also get a notification for the request of money
  • The payer will click on the notification and review the payment
  • He/she can decide to accept or decline
  • If the payment is accepted, the payer will enter the UPI PIN and authorise the transaction
  • The payer will get a 'successful or decline' notification
  • You will get a notification and SMS from the bank.

UPI Fees and Charges

There are no fees and charges applicable to the UPI platform. The UPI programme was launched with the aim to promote digital transactions. The NCPI had earlier marked the transaction charges to be 50 paise per transaction. However, the Government of India had later cancelled these charges to make sure that more and more people started using the platform.

UPI vs. Cards and Cash

The main aim of the UPI applications is to promote digital transactions and paving way for a cashless economy. With UPI, users can avail the benefit of not carrying physical cash or any form of plastic money. All transactions can be taken care of using their smartphones.

How secure are UPI transactions

UPI transactions are secured using UPI PINs which is a 4-6 digit numerical combination. In addition to that, the applications are highly encrypted and has heavy bandwidth capacity.

Apps with UPI Feature in India

Below is the list of App that provides UPI Feature:

1.     Phonepe

2.     Paytm

3.     BHIM App

4.     Mobikwik

5.     Google Pay

6.     Uber

7.     Chillr

8.     Paytm Payments Bank

9.     SBI PAY

10.      iMobile

11.     Axis Pay

12.  BOB UPI