Since Indian government has decided to promote cashless transaction various payment system has emerged and UPI is the favorite one.

UPI full form is Unified Payment Interface is a kind of internet payment services that let you pay for goods and services from anywhere and anytime without visiting your bank. All you need a smartphone to operate the UPI.

NPCI (National Payment Corporation of India) introduced UPI in 2005. Earlier almost all financial institutions were hesitant to adopt it due to security concern.

But it gained immense popularity as time passed by. And now almost 60% of transaction happening through in unified payment interface and every bank has its own version of UPI.

What is UPI?

UPI is an advanced version of IMPS (Immediate Payment Service) from NPCI which can also be identified as your financial address.

Similar to bank account number UPI address is also unique for each user that lets you transfer and receive funds faster.

It works 24X7 and 365 days and isn’t dependent on bank holidays or specific work hours like bank transfer facilities such as NEFT, RTGS, etc.

You don’t need to visit for your bank details you can get all the information on UPI. All you need is PIN and UPI ID for a successful transaction.

How does UPI work?

With UPI, transferring fund to an individual is easier than cutting a cake. You don’t need to remember the recipient’s bank account number or such information.

All you need is their Aadhar number and the phone number that is registered with a bank.

You may also ask them for a cancelled cheque to set up the favourite using bank account and IFSC code that is written on the cheque leaf.

You can set up a UPI ID with any app that supports it. A UPI ID is just like an email id the only difference is here it starts with a mobile number and ends with the app being used for it.

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For example, if you use the Paytm app, your UPI ID will look something like “90xxxxxx@paytm. Following are the elements you will need to avail UPI benefits.

  1. A smartphone
  2. A bank account
  3. Netbanking facilities activated with the bank account
  4. An active mobile number that is linked to the account number
  5. An internet connection

Once you have all the above things, you are ready for the next step of set up your UPI ID. Here are the steps to follow:

  • Choose a UPI app (For example – BHIM, Paytm or GPay, etc.)
  • Submit your bank account information
  • Submit the OTP that you receive on your phone. This steps ensures that you are the owner of the account
  • Set up a PIN for your UPI ID
  • Select the contact from you contact list who has UPI ID to send/receive the money

Sending money through UPI is safe as it doesn’t disclose any bank details or any third party. It is one of the safest ways to send or receive money from any location without wasting hours in the bank queue.

UPI works in three ways:

  1. By scanning the QR code which is displayed on your screen
  2. Adding the receiver’s account number and IFSC code
  3. By entering the UPI ID of the sender or receiver respectively.

Features of Unified Payment Interface

NCPI often updates the UPI as per the data they receive from users.

  • One-time mandate – This feature lets you authorize a transaction and schedule it for a specific date. Using this facility the transaction will happen automatically at the scheduled date.
  • Verification of the invoice – The app directly sends the invoice to the clients online. It allows them to verify the details for the order. Therefore, they can send transfer the money to the merchant.
  • The overdraft account facility – Before users could only link the saving and current bank account to their UPI ID. But now they can access their overdraft account and set up an automatic payment. The maximum limit of the transaction is Rs. 100000 to Rs. 200000.
  • Advanced security – UPI is safe for sending and receiving money. When scanning the QR code, UPI now lets you verify the authenticity of your chosen merchant. The client receives the message if they are authorized dealer or not. You don’t need to share your card details or other information.
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UPI Benefits

Following are advantage of UPI than other payment gateways:

UPI (Unified Payment Interface)Other payment interfaces
Free money transferCharges up to 5% for every transaction
Best for small transactionDon’t allow small transaction because of high payment gateway charges
Utmost bank security. All is needs the unique PIN numberNeed to fill complete information including account number, IFSC code, etc.
Safe for money transferOften ignores cashless transaction due to security concerns
Transfer fund fast and easyTakes up to 24 hours
One app for all your bank accountsEach account need individual app
You don’t need to pay interest on payment transfer. All money goes direct into the recipients’ accountYou need to pay a fixed amount depending on the app you choose.

How to do UPI registration?

Registering for UPI is easy.

  • Step 1- Download the BHIM app.
  • Step 2- Create your profile with the details required.
  • Step 3- Link your bank account with your virtual PIN number and done.

How to generate MPIN for UPI

  • Choose a bank account from where you want to conduct transactions.
  • The bank sends an OTP to the registered phone number.
  • Enter the last 6 digits of your debit/credit card and expiry date.
  • Key in your OTP and the numeric MPIN you want to have.
  • Click “submit.”
  • You receive a notification “success or decline.”
  • Choose “success.”

You can also use credit to generate MPIN.

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How to pay your bills with UPI

UPI isn’t only allow you send and receive the money but also pay the bills. Whether it is your electricity bills, cell phone bills, grocery bills, or water bills etc. You can pay almost pay bills for anything that supports UPI payment. Here’s how you can do that:

  • Log in to BHIM or any other app with your UPI.
  • Choose the “bill pay” section.
  • Go to the “biller category” Choose your service; electricity, telephone, etc.
  • Choose your biller and give your consumer details.
  • Click the “pay now” option.
  • Key in your UPI PIN.

How to request money using UPI

The following mentioned steps to be able to request money using UPI.

  • Choose the “collect money” section in your UPI-supported app.
  • Key in the payer’s financial address.
  • Type in the amount.
  • Choose the time you want to be paid.
  • Click “confirm.”

UPI charges

  • Transaction through UPI is completely free for users. Even banks which are using the app never ask for it.
  • UPI is one of the best alternative of cash or credit cards that people are using for cashless transaction.

UPI FAQs

What is the UPI full form?

UPI stands for Unified Payments Interface (UPI) is an instant payment system developed by the National Payments Corporation of India (NPCI), an RBI regulated entity.

How do I get a UPI account?

To get a UPI account you will need to download BHIM app and create account with required information.

Which UPI app is safe?

BHIM is the most popular and safe app for cashless transaction. BHIM full form is Bharat Interface for Money. It is a UPI enabled initiative to facilitate safe, easy & instant digital payments through your mobile phone.

What if I enter the PIN number?

Your transaction will fail. And the money will not be deducted from your account.

Is debit card required for UPI?

Yes. The debit card is mandatory to set up the UPI PIN.

Is BHIM UPI safe?

Yes. It is one the safest payment gateway at present developed and maintain by NCPI.

How much is UPI limit?

At present, the UPI transfer limit per UPI transaction is Rs. 1 Lakh.

Which is better Netbanking or UPI?

UPI only requires the Virtual Payment Address (VPA) of the beneficiary whereas Internet Banking requires the beneficiary’s bank account details. 

Can we track UPI transactions?

Yes. You can raise your grievance or check status of UPI transaction through the UPI App of the participating banks.

What is the benefit of UPI?

UPI or Unified Payments Interface is a digital payment system which allows different bank accounts to use a single mobile application. It is a seamless platform which facilitates real-time money transfer with a UPI ID and PIN.

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