Unified Payments Interface is a real-time interbank payment system for sending or receiving money. It was introduced on 11 April 2016. Its owner is the National Payments Corporation of India (NPCI). It is integrated with more than 120 banks in India. Consumers can participate in P2P transfers as long as they both have an account in one of the registered banks. To initiate fund transfer, users have to use any UPI supporting Android or iOS app, link their bank accounts and generate BHIM UPI PIN. Funds can be transferred via the following methods:
- Virtual Payment Address (VPA): Send or request money from/to bank account mapped using VPA.
- Account number & IFSC: Send money to a bank account.
- QR code: Send money by scanning QR code with enclosed VPA or Account number & IFSC.
- Mobile number: Send or request money from/to the bank account mapped using a mobile number.
- Aadhaar: Send money to the bank account mapped using the Aadhaar number.
Once the fund transfer is initiated, money is debited from the payer’s bank account and deposited in the recipient’s bank account in real-time. This system works 24×7, including weekends and bank holidays.
How is UPI unique?
- Immediate money transfer through mobile device round the clock 24*7 and 365 days.
- Single mobile application for accessing different bank accounts.
- Single Click 2 Factor Authentication – Aligned with the Regulatory guidelines, yet provides for a very strong feature of seamless single click payment.
- The virtual address of the customer for Pull & Push provides for incremental security with the customer not required to enter the details such as Card no, Account number; IFSC etc.
- Bill Sharing with friends.
- The best answer to the Cash on Delivery hassle, running to an ATM or rendering the exact amount.
- Merchant Payment with Single Application or In-App Payments.
- Utility Bill Payments, Over the Counter Payments, Barcode (Scan and Pay) based payments.
- Donations, Collections, Disbursements Scalable.
- Raising Complaint from Mobile App directly.
UPI – Benefits
Benefits for banks:
- Single click Two Factor authentication
- Universal Application for transaction
- Leveraging existing infrastructure
- Safer, Secured and Innovative
- Payment basis Single/ Unique Identifier
- Enable seamless merchant transactions
Benefits for end Customers:
- Round the clock availability
- Single Application for accessing different bank accounts
- Use of Virtual ID is more secure, no credential sharing
- Single click authentication
- Raise Complaint from Mobile App directly
Benefits for Merchants:
- Seamless fund collection from customers – single identifiers
- No risk of storing customer’s virtual address like in Cards
- Tap customers not having credit/debit cards
- Suitable for e-Com & m-Com transaction
- Resolves the COD collection problem
- Single click 2FA facility to the customer – seamless Pull
- In-App Payments (IAP)
Drawbacks of UPI
Balance in Free-charge e-wallet is not transferable to an e-wallet of Paytm, nor can we transfer the cash-back earned in bank accounts. To top it all, there are restrictions for the maintenance of minimum wallet balances and marketing gimmick of cash backs, which again cannot be transferred or used freely. You must know that you have to transfer money from the Unified Payments Interface pin is also known as the UPI PIN and it is a very small digit i.e. 4 or 6 digits while having a small digit, it is not safe, so make your payment carefully and its information Do not let anyone else know.
About the Author
Dr V Basil Hans is HOD of Economics and Dean of Arts, St Aloysius Evening College, Mangalore. He is an interdisciplinary teacher and researcher. He has written more than 25 books and more than 210 articles. His book Digital Banking has been translated into eight foreign languages. Two of his recent books are Culture of Sanitation in India – from India Valley Civilization to Sulabh, and Infrastructure Economics.
