What is UPI ?
UPI stands for Unified Payments Interface, It is a quick simultaneous payment system that helps in immediate fund transfer between two bank accounts through a mobile phone. Hence, UPI is a concept that permits multiple bank accounts to be bring into a single mobile application. The idea was developed by the National Payments Corporation of India and it is regulated by RBI (Reserve Bank of India) and IBA (Indian Banks Association).
How UPI Works
There are three methods to transfer money through UPI -
- By entering the receiver's virtual payment address. (VPA)
- Through account number and IFSC code.
- Or through Quick Response (QR) code.
It allows transfer of funds from one bank account to another bank account instantly through one's mobile phone. Payment can only be made through the app on the mobile device. Money transfer through UPI works on 24x7 basis.
Why you need to use UPI
To use UPI, you must have a bank account with any bank, Your bank should allows you to use the UPI facility. Some of the member banks including State Bank of India (SBI), HDFC Bank and ICICI Bank.
Once you checked whether your bank supports UPI payments or not, you need to download the UPI supporting app on your smart phone. Some of the commonly used apps that offer payment through UPI method are BHIM, developed by NPCI, and also some private players such as Paytm, PhonePe, Google Pay, Amazon Pay etc.
Remember, your mobile number should be registered with your bank account for the purpose of verification.
How to set up UPI
Once you have downloaded the selected UPI app, You have to select the bank from the given options. Your bank will send you a OTP (one time password) to verify that it is your bank account or not. Once the OTP is verified, your Virtual Payment Address (VPA) will be created.
Here is some steps to set up a UPI account using the BHIM App -
Step 1 : Download the BHIM app and install it from Google Play Store or Apple App Store.
Step 2 : Select your preferred language.
Step 3 : Select the SIM in which your mobile number is registered with your bank account.
Step 4 : Set a four digit login password. You will need to enter this four-digit password to access the app.
Step 5 : Select and link your bank account now. Set your UPI PIN by providing the last six digits of your debit card and expiry date.
Your account is now registered and you can send or request to transfer money in your account. Remember, you are not allowed to link your mobile wallet to UPI, You can only link your bank account to UPI. You can link more than one bank account with UPI.
Maximum limit for transfer of funds
According to the NPCI website, currently the upper limit per UPI transaction is Rs 1 lakh/day per account. Different banks may have their own sub-limits.
Key Features of UPI
Some of the features of UPI are listed below -
- Instant transfer of funds through Immediate Payment Service (IMPS) which is faster than NEFT.
- Since it is completely digital, So can be used 24 hours a day and also on all public holidays.
- Single mobile application for accessing various bank accounts.
- Uses a unique virtual payment address ID which is given by your bank.
- Uses account number with IFS code and mobile number with Mobile Money Identifier.
- MPIN (Mobile Banking Personal Identification Number) is required for each payment confirmation.
- Also available on USSD service where users can access the service by just dialing *99# and select services like fund transfer, send money, request money, non-financial services, balance enquiry, change MPIN etc.
- Each bank provides it's own UPI for different platforms of Android, Windows and IOS.
- Bill sharing facility.
- Best for making utility bill payments, merchant payments, OTC payments, barcode based payments.
- Anyone can directly register a complaint from the mobile app.
What makes UPI a secure platform
The interface is based on Two Factor Authentication with a seamless single click payment. This feature of UPI is in line with the regulatory guidelines making it the most secure. Two Factor Authentication is very similar to OTP. Here MPIN will be used instead of OTP.
