What is UPI and how does it work?

Unified Payment Interface, UPI is a popular payment mode. It allows users to transfer funds from one account to another without any hassle. It is a simple, free of charge and instantaneous platform that allows transactions 24/7 & on all 365 days. And in addition, it is also one among the most secure payment methods.

What is UPI ?

The UPI payment system was launched by National Payments Corporation Of India (NPCI) in 2016. This bank-led system is an advanced version of the old-school payment methods of IMPS and NEFT. The interoperable system allows customers to make quick real-time payments just with smartphones.

To enable payment using a phone, users just need a mobile payment application and the virtual address of the recipient. This same process is implied for all accounts whether personal or to a nearby vendor.

How to start using UPI payments as a customer? 

Turning to UPI for payment is just not laborious. Once your profile is created, you can shop, pay and collect using your UPI id.

• Install any UPI app/PSP available in the play store or app store. 
• Sign in with the phone number linked to your bank account.
• Enter all the required details to enable your profile for transactions.
• Generate OTP and tap on the Next button
• Set your UPI PIN
• Click on ‘Add Bank Account’ and then select your bank from the list
• Enter your UPI pin and you will get your UPI ID/VPA
• To make payment enter the desired amount.
• Confirm your transaction with the 4 digit UPI PIN.

According to the NPCI website, at present, the upper limit per UPI transaction is Rs 1 lakh per account per day. Within this upper limit different banks may have their own sub limits hence one should check with the bank.

What are the benefits of UPI ?

• UPI is a fast, hassle-free and the most affordable mode of money transfer.
• A single click authentication allows transactions beyond boundaries.
• Users just need a working internet connection and accurate UPI id for all transactions.
• No private and sensitive data is required to execute transactions.
• Users can easily link all accounts to one ID on the UPI app to avoid further confusions.
• Empowers digital India movement while supporting cashless payments.
• Use UPI to collect funds from the client in no real time.
• All complaints are heard and solved directly on the UPI app.