UPI is a digital payment system that stands for Unified Payments Interface. With the help of UPI, you can send or receive money from your friends or relative anytime and anywhere by using your Smartphone. National Payments Corporation of India i.e NPCI started UPI for digital transactions on 11 April 2016. The Popularity of UPI because at peaks after the demonetization in November 2016.
There is a large number of online payment systems available for mobile users in India. Some of these payment systems are Netbanking, Mobile banking, Digital and mobile wallets like Google Pay, Paytm, Amazon Pay, etc. But as UPI is owned and operated by NPCI and is an initiative by the Indian Government, so it is one the most secured payment system compared to other online payment systems.
Making online payments through Netbanking, Credit Cards, Debit Cards, etc takes time. But with the help of UPI, you can make the payment instantly and one of the main advantages of it is that the payment is totally contactless.
By using UPI, we can make payments of any kind for example if you purchase anything from an eCommerce website or from a physical store, then you can easily make the payment of your shopping by using UPI.
Apart from UPI can also be used to make the payments of the following:
- Purchasing Movie Tickets
- Electricity Bill payments
- Mobile Recharge
- DTH Recharge
- Bus, Train, Flight Tickets, etc
A few years ago, the number of UPI users was not very large, but more and more people are getting aware of it and now they are using UPI to make online transactions.
Many mobile payment apps like PhonePe, Paytm, Google Pay, Amazon Pay, etc have also now incorporated UPI into their apps. So anyone using these mobile payment apps can also make payments through UPI.
How UPI works
The functionality of UPI is based on a technology named IMPS which stands for Immediate Payment Service System. IMPS is similar to NEFT technology which is used by banks to transfer money from one account to another. But there are a lot of differences between IMPS and NEFT, and it is much better than NEFT.
One of the main benefits of IMPS over NEFT is that using IMPS you can transfer money or make a payment anytime which is not possible in the case of NEFT. It is not possible to make payments through NEFT on Sundays or bank holidays, but as mentioned above IMPS used in UPI can be used for online transactions 365 days a year.
Transferring money through UPI is just a matter of few steps, all you need to have is a UPI ID, enter the amount to transfer and then transfer it. You don’t have to enter any account number, branch name, credit/debit card details, etc.
Benefits of UPI
There are many benefits of using UPI
- Money is transferred almost instantly
- Money can be transferred to all banks by using only one UPI-based app.
- There is no need for a bank account number, branch name, etc to transfer money.
- Using UPI, money can be transferred by using only VPA or UPI id
- UPI is the safest online payment system
- Money can be transfer 24*7, 365 days
What is UPI ID
UPI ID is similar to an email address that has this format: yourname@bankname. For example, if you have an account with SBI bank, then your UPI id will be like Akshay@sbi. Suppose you have an account in any bank, then you have a unique bank account number issued by the bank. To transfer money to someone, you need to mention that person’s account number. Similar to a bank account number, a UPI ID is a unique identifier that uniquely identifies a person and it is a must to transfer money to any other person through UPI.
What is UPI PIN
In order to transfer money through UPI and to use its other services, you must have a UPI PIN. The full form of PIN here is ‘Personal Identification Number’. UPI PIN is a 4 digit number. If you use an ATM or Debit Card, then you must be aware of the ATM PIN. UPI PIN is similar to ATM PIN which is basically a string of numbers that is set up while creating a UPI account. UPI PIn is required while sending money or making payments. You can’t proceed to make payments without entering UPI Pin. Although UPI PIN is of 4 digits in some cases, it may be of 6 digits.
How to Get UPI PIN
Follow the below steps to get UPI Pin
- The thing you are required to do is to download and install any of the UPI-based apps on your smartphone.
- You can download any UPI-based app like Google Pay, PhonePe, Paytm, BHIM UPI, etc.
- After installing the App, you will be asked to give the Phone Permissions.
- Once you give the Phone Permissions to the app, then you will have to enter your personal information like Email id, Mobile Number, etc.
- You will see a list of various banks while doing registration for the UPI.
- From this list, you will have to choose, the name of the bank in which you have your account.
- You will now have to link your bank account with the UPI app.
- For this, you will receive an OTP on your registered mobile number.
- After verifying this OTP, your bank account will be linked.
- Now you will see an option to set up your UPI Pin.
- Then you will have to enter the details about your Debit Card.
- You will be required to enter the last six digits of your Debit Card and the expiry date mentioned on the Card.
- An OTP will be sent to your registered mobile number from your bank.
- You will have to fill this OTP number in the UPI App
- Then you will have to enter a 4 or 6 digit code or a number of your choice.
- This 4 digit code is nothing but your UPI PIN.
- So your UPI Pin is now set up and you can use it for making any online payments.