UPI

UPI stands for Unified Payments Interface. It is a system that brings together multiple bank accounts (of participating banks) into a single mobile application, merging different banking features and merchant payments under a single roof. To explain in lucid language, if you have bank accounts in different banks registered with the same phone number, you can access all these accounts through a single app. The app brings all your bank accounts under a single UPI ID through which you can transfer money, pay to merchants and access several other banking facilities.

This payment system allows users to link multiple bank accounts in a single smartphone app, provided that the same mobile number is registered with each of the accounts. UPI can be used to make fund transfers via mobile numbers. There is no need to provide the IFSC code or account number. It is a real-time payment system in which funds are credited instantly on a real-time basis. A UPI has to use a virtual address (known as a Virtual Payment Address or VPA) to carry out any transaction.

It is slowly becoming the most preferred and convenient form of digital payment. The application interface is compatible with almost all banks and many digital wallets. Applications such as Google Tez, Paytm, Airtel Payments Bank, PhonePe, etc have adopted the platform.

The Government of India paved the way for this amazing financial tool. It aims towards digitally empowering the Indian society as well as bringing in a financial inclusion across India. Prime Minister Narendra Modi launched BHIM (Bharat Interface for Money) in 2016 right after the shocking waves of demonetization hit the Indian populace.

National Payments Corporation of India

National Payments Corporation of India (NPCI) is a unified organization for each system of retail payments across the country. The organization was originally created under the supervision of the Reserve Bank of India (RBI) and Indian Banks' Association (IBA). The main aim of setting up NPCI was to aggregate multiple payment systems existing across the nation with different service levels in total uniformity along with excellent standard business process being followed for retail payment systems. However, UPI was created to provide the public with a convenient and affordable payment platform, thus promoting financial inclusion.

How Does UPI Work?

In order to use the UPI facility, you need to choose a UPI platform and register your phone number. All your bank accounts linked to this number will get added and registered for UPI. Once you are successfully registered, you will get your UPI ID. This ID will enable you to send or receive money directly to and from your bank account. However, you can transact with only those who have already set up their UPI IDs.

Features of UPI

The UPI interface allows users to avail of numerous services such as:

• Sending funds
• Receiving funds
• Making requests for funds
• Merchant payments
• Paying for cabs

UPI Transaction Limit

The transaction limit of UPI is revised from time to time. The updated transaction limits of UPI are as follows:

• Maximum 20 transactions per day
• Maximum transaction limit of Rs. 1 lakh in a day for ICICI, HDFC, SBI and PNB using the BHIM app. (other banks might have varying limits)
• Maximum amount of Rs.10,000 per transaction through BHIM app.

Types of Transaction via UPI

These are the types of the transactions that can be conducted through UPI are

Remittances: You can quickly transfer money even without knowing the receivers bank details. All you need is the concerned person's mobile number and you can transfer money to him/her by a few simple clicks.

Bill payments: Whether phone bill or your utility bill, all bill payments can be made through UPI.

Merchant transactions: You could book flight tickets or buy a movie ticket or even pay for your online shopping using UPI.

How Do I register on the UPI App

Follow these simple steps to register on your bank's UPI app:

• Download the BHIM app or your concerned bank's UPI app from your App Store or the Bank's website.
• Open the app and create a profile by signing up.
• Enter all the required details and create a virtual id and password.
• Link your bank account number/s with the virtual id.
• Generate the MPIN; you will receive an OTP from your bank as you initiate MPIN creation.
• The app will ask for the last six digits of debit card number along with the expiry date of the card.
• Enter the digits and the OTP.
• Create a desired MPIN and register by clicking the 'Submit' button.
• You will then receive a confirmation text.

Making Payments Using UPI

Follow these steps to send money using UPI:

• Log in to your UPI application.
• Select the option for sending money or making payment.
• Enter the beneficiary's virtual id followed by the amount you wish to send.
• A confirmation message will appear for you to cross-check the details.
• Enter the MPIN to initiate the transfer.
• You will get an update of the transaction status as an SMS.

Receiving Payment Using UPI

UPI lets you request for funds from your contacts. This is how you can do it:

• Log in to your UPI app.
• Tap on the 'collect money' or 'request money' option.
• Enter the sender's virtual id, mention the amount and select the account where the money should be credited.
• Review and confirm the details.
• The request notification will be sent to the concerned person.

The payer, upon receiving the notification, must do the following:

• Tap and click on the notification.
• Open his or her UPI app and review your payment request.
• Tap on 'accept' or 'decline.'
• Enter the MPIN to authorize the transaction.

Once the transaction is complete, both the sender and the requester will receive notifications from their respective banks.

FAQs

What is UPI?

UPI or Unified Payments Interface is a real-time fund transfer process managed by the NPCI. The system is based on the interface of IMPS.

Which UPI app should I download?

Google play store has several apps. BHIM is the government's UPI app whereas most banks have their own UPI apps too.

Is it mandatory to download the UPI app of your bank?

No, any UPI app can be used.

What is a UPI PIN?

This is typically a six digit pin that is set during the registration process to authorize all UPI transactions.

What if the UPI transaction fails but the money gets debited from the bank account?

The money is supposed to be credited back to the user's bank account within an hour. If not, contact the bank's customer care.

What if the money is deducted from the account even though the transaction is pending?

Usually, pending status is displayed in case of server issues in the backend although the transaction has actually been processed. The glitch will be resolved within 48 hours, else one must contact the bank's customer care.

Can one have multiple UPI apps on the same smartphone linked them to separate bank accounts?

Yes, one can link multiple UPI apps to the same bank account number.

Which mobile platforms support UPI?

UPI is supported by Android and iOS platforms.

What is the maximum amount that one can transfer using UPI?

The maximum amount permitted is Rs.1 lakh per transaction.

How to register a complaint with UPI?

The UPI app itself has an option for registering complaints.

What are the consequences of entering a wrong UPI PIN?

The transaction will fail if a wrong PIN is entered.

Can one make merchant payments UPI?

Yes, most e-commerce sites provide the UPI option for payment.

How to make online payments using UPI?

Visit the merchant site, select the UPI option, enter the required details and your UPI PIN to authorize the transaction.

Can one make money transfers on bank holidays?

Yes.