Unified Payment Interface (UPI) Overview

What is UPI?

The Unified Payment Interface (UPI), which permits immediate, cost-free money transfers between bank accounts, is one popular mobile payment alternative. UPI has streamlined financial transactions for account holders ever since it was first introduced.

Each user must have a UPI ID to send money through the UPI system. A bank account's UPI ID serves as a special identity for sending and receiving money across banks. You don't have to enter the recipient's UPI ID in UPI payment apps like Paytm. To send money via UPI, you can just choose the recipient's contact from your phone book or enter the recipient's contact number. On the other hand, a 4 or 6-digit personal identification number known as the UPI PIN is necessary to send money using UPI. Every account holder has the choice to customize their UPI PIN.

How does UPI Work?

The user can complete any transaction by merely employing a virtual address known as a Virtual Payment Address (VPA). UPI was developed by the National Payments Corporation of India (NPCI), and the Reserve Bank of India is in charge of managing it (RBI). UPI is quickly becoming the method of choice for online payments. The following conditions must be met to use UPI for money transfers:

A working bank account and a cell phone.

The bank account must be linked to both the active mobile phone. Online accessibility

The preferred way to make payments online is gradually becoming UPI. Among the apps is Google Tez, Paytm, PhonePe, and programs of a similar nature.

What features and benefits come with UPI adoption?

Transactions online are made simpler.

For fast fund transfers, use UPI payments to pay for your online shopping, food delivery, and taxi services.

Pay online at the restaurants, groceries, and department stores in your neighborhood.

Rent, telephone recharges, and utility payments can all be made instantly online.

Is it safeguarded?

UPI transactions employ a very secure, hard-to-crack encryption format. Around Rs. 8,000 crores worth of transactions are processed every day using the NPCI IMPS network. It is expected that this would grow quickly using UPI technology. It uses a two-factor authentication mechanism similar to OTP to authenticate each transaction. However, UPI PIN would be used instead of OTP for validation.

Indian apps with UPI functionality

The list of applications that offer the UPI feature is below:

PhonePe \ Paytm

App BHIM

MobiKwik

Tez Google

Payments via Paytm, Uber, and the Bank

Pay SBI

Android Axis Pay

UPI BOB

You can see a complete list of banks that provide the UPI service at https://www.npci.org.in/what-we-do/upi/live-members.

Signing up for a UPI-compatible application

The UPI app must be downloaded from the App Store in order to register.

You can also enter information to construct your profile, such as your virtual ID (payment address), name, and password.

You can select the 'Add/Link/Manage Bank Account' option and then associate the virtual ID with the bank and account number.