In 2106, India moved one more step closer towards becoming a cashless economy. It was the year when, the then RBI governor Raghuram Rajan, first launched the Unified Payment Interface, better known as UPI. This new payment method revolutionized the traditional way in which we pay money, eliminating the need for us to carry our wallets everywhere we go. With this modern method of payment, the smartphone doubles as the virtual debit card which can be used to make payments. Yet, a majority of the masses remain unaware about this revolutionary payment system. Here’s everything you need to know about UPI.
What exactly is UPI?
UPI payment is an online payments solution that facilitates the instant transfer of funds between two or more people, simply with the help of a smartphone. You can use UPI to receive as well as send funds. The UPI can be thought of like the e-mail ID for your money. It is a unique identifier, used by your bank to transfer funds and make payments using the immediate payment service or IMPS.
How does UPI work?
You can start using UPI simply by downloading the UPI app from the Play Store, on your internet enabled smartphone. This service is offered by most Indian banks. After downloading the app, you have to register your details and create a virtual address. You must also link your mobile number to the unique mail address created. Once you have created the account, you can start sending and receiving funds up to 1 lakh, from other users who have set up the UPI payment method on their phones. The transaction can be done distantly, but to ensure your account’s safety, it is authenticated by your bank.
How is UPI different from other electronic payment methods?
While other electronic methods of banking like NEFT, IMPS and RTGS require the user to register on the bank’s website and add the beneficiary’s banking details, all this is eliminated while making payments through UPI. As we mentioned above, the only things necessary are the senders and receivers’ phone numbers and virtual mail IDs. There is no need to share each other’s bank account details to make the transaction. Furthermore, UPI payments can be made 24X7, throughout the year, whereas NEFT and IMPS payments go through only during banking hours. Plus, there are limitations on fund transfer through NEFT and IMPS. You do not have to enter other details like the bank’s branch and IFSC codes.
What is the main objective behind UPI?
The Unified Payment Interface was introduced to help the country adapt to and move towards a cashless economy in the long term. The objective was to reduce the amount of cash in the system and create transaction trails, boost revenues and decrease tax evasion by bringing peer to peer payments for even the smallest of amounts online.
What exactly is UPI?
UPI payment is an online payments solution that facilitates the instant transfer of funds between two or more people, simply with the help of a smartphone. You can use UPI to receive as well as send funds. The UPI can be thought of like the e-mail ID for your money. It is a unique identifier, used by your bank to transfer funds and make payments using the immediate payment service or IMPS.
How does UPI work?
You can start using UPI simply by downloading the UPI app from the Play Store, on your internet enabled smartphone. This service is offered by most Indian banks. After downloading the app, you have to register your details and create a virtual address. You must also link your mobile number to the unique mail address created. Once you have created the account, you can start sending and receiving funds up to 1 lakh, from other users who have set up the UPI payment method on their phones. The transaction can be done distantly, but to ensure your account’s safety, it is authenticated by your bank.
How is UPI different from other electronic payment methods?
While other electronic methods of banking like NEFT, IMPS and RTGS require the user to register on the bank’s website and add the beneficiary’s banking details, all this is eliminated while making payments through UPI. As we mentioned above, the only things necessary are the senders and receivers’ phone numbers and virtual mail IDs. There is no need to share each other’s bank account details to make the transaction. Furthermore, UPI payments can be made 24X7, throughout the year, whereas NEFT and IMPS payments go through only during banking hours. Plus, there are limitations on fund transfer through NEFT and IMPS. You do not have to enter other details like the bank’s branch and IFSC codes.
What is the main objective behind UPI?
The Unified Payment Interface was introduced to help the country adapt to and move towards a cashless economy in the long term. The objective was to reduce the amount of cash in the system and create transaction trails, boost revenues and decrease tax evasion by bringing peer to peer payments for even the smallest of amounts online.
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