The Buyt Desk
Unified Platform Interface (UPI) is a type of cashless digital payment system that helps transfer money instantly from one bank account to another using your mobile phone. This service is available 24X7 and without any charges. The National Payments Corporation of India (NPCI) developed Bharat Interface for Money (BHIM) app in 2016 to facilitate online retail payments through UPI. In 2018, NCPI released another version, UPI 2.0. NPCI is under the control of the central bank, the Reserve Bank of India. UPI may be understood as advanced IMPS (Immediate Payments Service) system that is easier to use and less costly. You can create a UPI ID or Virtual Payment Address (VPA) through the BHIM app. The VPA is directly connected to your bank account. At the time of registration, you create the UPI PIN (Personal Identification Number) that is used to authorize every bank transaction in the future. Eventually, banks and private players also started supporting UPI. A VPA created on the bank or private company PSP (Payment Service Provider) app can also be used on the BHIM app. NPCI certifies the PSP app, which can provide a UPI ID/VPA.
Features of UPI and UPI 2.0
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UPI is a highly secure payment system as it transfers money using a mobile number but retrieves the bank account details in a masked manner.
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It is available on both the Android operating system and iOS.
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UPI had a daily transaction limit of Rs.1 lakh. However, the limit was increased to Rs.2 lakhs for UPI 2.0.
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With UPI, you could link saving and/or current accounts with your VPA. However, with UPI 2.0, you can link even the overdraft account with your VPA.
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You can link more than one bank account with a particular UPI ID/VPA. Moreover, you have the liberty to use more than one PSP app on the same mobile phone and use the same or different VPA on them.
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You do not need to register the beneficiary’s bank account for sending money as is required for NEFT.
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Earlier, discrepancies were reported between the payment and invoice of the purchase. UPI 2.0 has improved features like prior verification of the invoice before making the payment. In addition, it allows both the buyer and the seller to pre-authorize payment for a future date.
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You can link only a bank account to a UPI ID. Neither a debit/credit card nor a mobile wallet can be linked to the UPI ID.
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Either the payer or the receiver can initiate a bank transaction via UPI.
How to set up a UPI ID?
Follow the steps to set your UPI ID:
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Download a PSP app. Banks have their own specific UPI apps. You can also use the public UPI app – BHIM – or private UPI-enabled apps like PhonePe, Paytm, or GPay, etc.
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Register with the app using the mobile number that is linked to your bank account.
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To verify your mobile number and the bank account, an OTP will be sent via SMS on your phone.
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As soon as you enter the OTP in the UPI app, you will receive a prompt to set your UPI PIN.
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Next, you have to select the bank with which lies your account. Now, you can transfer money to another bank account without sharing your bank account details.
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A UPI payment can be made by using any of the following:
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UPI ID/VPA
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Mobile number
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QR code
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Aadhaar number
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Account number and IFSC
UPI is a big step towards the goal of Digital India. It is quite easy for the user to make instant payments via UPI ID in a secure manner. This payment service reduces the chances of fraud. Do create your UPI ID and transact instantly through any of the available numerous PSP apps.
