What is UPI and how does it work?

The full form of UPI is Unified Payment Interface. It is considered to be the most secure method of cashless payment. Read this article to know how it works and what are the top benefits of UPI.
What is UPI
What is UPI

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.

FAQ

What is the payment gateway for UPI?

No, the government is in no plan to levy charges for making payments through unified Payments Interface.

Is it possible to increase the UPI limit?

No, there is no possibility of increasing the UPI limit.

What is the UPI limit per day?

Users can do a total of 10 transactions in a day.

What is the full form of UPI?

The full form of UPI is Unified Payment Interface.
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