UPI is a payment system developed for use in smartphone applications, therefore, enabling swift transfer on money between bank accounts and mobile phones. UPI refers to the Unified Payment Interface which was created by the National Payments Corporation of India (NPCI) in collaboration with the Reserve Bank of India (RBI) along with the Indian Banks Association (IBA). The framework was built by NPCI but is regulated by RBI and India`s Central Bank.
Earlier it was welcomed only by few banks at its introduction in the market in 2016, but thereafter several other banks tied up with NPCI to offer UPI services to their customers when they realized the potential of the UPI system. Almost every bank today has its own UPI along with other many varying payment options available. These applications also provide similar functions allowing swift, easy and quick transactions using Unified Payments Interface (UPI) such as Google Pay. According to NPCI reports, as of February 2019, 134 banks were using, UPI and around 300 billion was transferred through UPI in this month.
Benefits of UPI
One know benefit in which UPI takes pride in is offering a fast and swift transfer of money, bill payments, payments for shopping and much more. Also allowing direct transfer of money from your bank account to an account of another person.
The transactions are safe and do not require sensitive bank details to initiate every transaction after the first few.
After registering with the payment app you get a UPI ID which accounts for your financial address. This financial address allows instant transfer and receiving of funds.
How UPI Works / How to Use UPI:
The first step is you download the UPI app of your bank from the play store or the apple store
Then you open the app where you will be guided by a set of instructions one by one, read the instructions and fill in the credentials like your name, address, email id, bank details, and other such information.
Followed by verification of your mobile number via which you will be registering for the UPI app. Make sure that the number you are registering with is the same as the number you have assigned in the bank account.
The number should be functioning and active in the phone after which you will be taken to a page that will ask you to set a virtual address as the username and set a password and m-pin.
The m-pin is for ensuring the second level of safety for your transactions through UPI, involving two-step verification, password login followed by m-pin.
After completion of the registration for UPI, you will be directed towards the login page or logged in. If you are directed to the login page use the password that you set up for your id.
You will be needing your UPI id to make transactions, you will be needing the UPI id of the recipient and your m-pin to complete the transaction.
In cases where you don’t have the UPI id of the recipient, you can just put in the bank details like bank name, account number and IFSC code of the bank to send money to the recipient.
In some exceptional cases where your bank does not offer or does not have a UPI application tie-up, you can use other bank`s UPI. Since the UPI interface is compatible with most banks’ apps, however, in such a case your UPI id will not have your bank name as the extension. Some of the popular UPI apps are Paytm, PhonePe, Google Pay, etc. Transaction charges for using UPI are Rs. 0.50 per transaction which appears on your bank statements as IMPS transaction.
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