All that you wanted to know about Unified Payment Interface (UPI)
In 2015 Government launched the ‘Unified Payment Interface’ (UPI) an instant payment system, to enable secure, real-time money transfers from one person to another, or to a company. UPI took off in a big way post demonetization, giving boost to Government’s drive for digital payment.
What is UPI?
An initiative of National Payments Corporation of India’s (NPCI), UPI is an instant payment system. It has been set up with the support of the Reserve Bank of India and Indian Banks Association (IBA). UPI has been built over the existing Immediate Money Transfer Service (IMPS) and allows immediate transfer of money between two parties’ bank accounts. It works on mobile phones only.
How is UPI different?
Usually if you wish to make a bank payment online to your friend/a company, you have to enter their account number, account type, Bank name and IFSC code. Typing all this information on a phone is not a pleasant task. Additionally if the beneficiary has to be added, most banks take up to 12 hours to add a new payee and only then you can make the transfer.
UPI does away with all of this and simplifies online payment. The UPI interface allows you to send and receive money from your smartphone using your Aadhaar unique identity number, mobile phone number or virtual payments address without entering bank account details. You will not have to use your Bank account number and IFSC code.
With the UPI, you simply need to enter your details, and get a billing request on your phone – which you can accept or reject right away.
How can I begin a UPI transaction?
The first step is to download the UPI app and install it in your phone. Below diagram shows you the steps.
With UPI, you will no longer need to use a particular app to send and receive money. You will get a message on your mobile phone asking for authentication. Once you authenticate the transaction by entering your password, it will be complete. No bank details are shared between the two parties. The service is real time and available 24X7.
Apart from this, you can send money to your family and friends instantly.
Do banks have the UPI system?
Many Banks have already integrated UPI into their existing apps. If your bank is UPI-enabled, you can ask it to connect you to the system. To initiate a transaction, you can use two types of address—global or local. Global address includes your mobile, Aadhaar and bank account numbers. You can also use a virtual address as your local address. With this virtual address you can send and receive money from multiple banks and prepaid payment issuers.
What is an UPI-PIN?
UPI-PIN (UPI Personal Identification Number) is a 4-6 digit pass code you create/set during first time registration with the App .You have to enter this UPI-PIN to authorize all bank transactions.
What is a Payment Address?
Payment Address is an Address which uniquely identifies a person’s bank a/c. You can just share your Payment Address with anyone to receive payments (no need for bank account number/ IFSC code, etc.). You can also send money to anyone by using their Payment Address.
What happens if I enter wrong UPI-PIN during a transaction?
No problem! The app will prompt you to re-enter the correct UPI-PIN.
What are the chances of my UPI transaction failing?
UPI transaction can fail due to multiple reasons most likely due to connectivity issues to the banking system, incorrect Payment Address entered or wrong UPI PIN entry. If your transaction fails, please try again.
What if I lose my mobile?
In case of mobile loss, you need to simply block your mobile number. This ensures that no transaction can be initiated from the same mobile number which is a part of device tracking and at the same time MPIN would be required for any transaction which is not to be shared with anyone.
What are the advantages of using UPI?
- Your smartphone becomes your bank!
- Real-time settlement of funds
- No need to remember or share bank account details
- Send money using virtual ID
- Add multiple ban accounts in the same application
- Transact as low as INR 50 to as high as INR 1 lakh
What are the transaction charges for using UPI?
UPI till now has been free compared to the transaction costs levied on using IMPS and NEFT.
Start transacting via UPI today!
Since August 2016, transactions done on UPI have increased 100 times!
According to data released by the NPCI, UPI transactions surged to 9.2 million in May from 6.9 million in April and 92,000 in August. The total value of UPI transactions shot up to Rs 27 billion in May from Rs 7 billion in December, a month after the government demonetized high-value banknotes.
If you have not been using the UPI so far, start today!