New Delhi. In the era of Digital India, if any one technology has completely changed the way we make everyday payments, it is Unified Payments Interface i.e. UPI. Today, from buying vegetables to paying electricity bills, every small and big payment can be done through UPI in a jiffy. But have you ever wondered what UPI is, how it works and why it is considered the world’s fastest payment system?
What is UPI?
UPI is an instant payment system, which has been developed by National Payment Corporation of India (NPCI). It lets you send and receive money directly from your bank account in real-time 24×7. In simple language, UPI system links your bank account to your mobile and then you can send money just through mobile number, QR code or UPI ID. Its biggest advantage is that you do not need to enter your bank account number or IFSC code every time.
Features of UPI
- Payment possible 24×7×365 days
- Facility to send and receive money in seconds
- Transfer only through mobile number, QR code or UPI ID
- Facility to send money to any bank
- Bill payment, recharge, shopping, everything through this
How does UPI work?
1. Linking to bank account app
First of all you choose any UPI app like PhonePe, Google Pay, Paytm etc. After this the app identifies your bank account on the basis of phone number and links it to the UPI system.
2. Creating UPI ID
Every user gets a unique identity, like yourname@upi, mobile@bank etc.
This is your digital payment identity which is called UPI ID.
3. Setting UPI PIN
When linking the account for the first time, you have to set a 4 or 6 digit PIN.
Every transaction is authenticated with this PIN.
4. How is payment done?
- You enter the amount, choose UPI ID or QR code
- Enter UPI PIN
- The entire transaction is completed in real-time i.e. no lengthy bank process, no hassle of OTP, no waiting for hours.
5. Ways to send money in UPI
The biggest advantage of making payment through UPI is that there are many ways to do it:
- Sending money through UPI ID
- Payment by scanning QR code
- send money from mobile number
- Small transactions with UPI Lite
- Subscription or EMI through AutoPay
- UPI Tap & Pay (payment through NFC)
Why did UPI become so popular?
1. No charge and easy use
At present, there is no extra charge on UPI transaction, which makes it economical and easy. Suppose you send Rs 100 to someone, then Rs 100 is deducted from your account and Rs 100 reaches the recipient’s account.
2. Strong security
UPI works only on your mobile and your PIN, so it is considered secure. PIN is required for every payment and no UPI app can view or save the PIN.
3. Promotion of cashless economy
UPI has given a new direction to digital payments in the country, from small shopkeepers to big businessmen.
4. Bank-to-Bank Direct Payment
No need to put money in any wallet – money goes directly to and from the bank.
What are the new updates of UPI?
With time many new technologies have been added to UPI. These features have made it a model for the world as well.
- Rupay Credit Card on UPI- Through Rupay Credit Card on UPI, you can also make UPI payment to the merchant through your Rupay Credit Card.
- UPI Lite: Small payments possible without UPI PIN
- UPI Credit Line: Credit facility through UPI
- Tap & Pay: Payment through NFC
- UPI Global: Payment abroad
