Immediate money transfer system-UPI
Earlier, having banking services 24×7 was a big hurdle for us. With the Immediate money transfer system-UPI innovation, transferring money has become easy. You can go for cashless withdrawal.
UPI stands for Unified Payment Interface. This application is for payment. With this system, you can transfer money between parties. It is a rapid method in which you don’t need to know the IFSC code to whom you are transferring money.
Background of UPI
UPI became successful in December 2019. Google suggested Federal Reserve Board follow UPI as an example in developing countries. UPI became a famous payment choice for initial public offerings (IPOs) around 1 January 2019. India became the world’s largest actual-time payment merchandise of UPI with 25.50 billion annually in the year 2020.
Facts About UPI
- UPI users can transfer money by providing the sender’s UPI ID, the bank account, or the mobile number linked with UPI.
- You need not carry cash because of UPI. Even ATMs are not required.
- Users can choose the UPI payment option while making online payments through any service provider app that offers this payment mode. For e.g, you want to pay your power bills. If a certain app allows UPI payment, it will load the same.
- In India, the largest share of $2 trillion of annual digital payments comes from UPI.
Uniqueness of UPI
UPI is a system that powers different banks in your mobile phone. It gains huge success in the field of digital payment. Some of its unique qualities are:
- You can transfer money 24×7.
- In one mobile application, you can access different bank accounts. Suppose, you have a bank account in SBI and in Punjab National Bank. You can access both of your banks in the same app.
- A higher level of security is provided with 2 Factor authentication.
- You can complete the procedure with just a single click.
- QR Code,
- You don’t need to find ATMs everywhere to shop.
- You can pay other bills such as Electricity bills, health insurance, etc.
- You can directly complain with your mobile phone in case of any emergency.
- In-app payment or a Single application offers merchant payment.
- In the case of Pull and Push, the user’s virtual location provides incremental security. You don’t need to enter details like Card Number, IFSC Code, and Account Number.
Virtual Address: The address through which you can make your payment.
Pull and Push: In the pull method, the payee instructs the payer to send the money. While in the push method, a payer initiates the sending of money to a payee.
Participants in UPI
Some of the participants of UPI are:
- Payer PSP
- Payee PSP
- Remitter Bank
- Beneficiary Bank
- National Payment Corporation of India (NPCI)
- Bank Account holder
Benefits to the Ecosystem participants
An immediate money transfer system-UPI is a boon to modern society. It makes bill payment convenient. It not only benefit customers but also bank by removing the burden. How UPI benefits banks?
Benefits for Bank
UPI allows banks to contact and transfer funds with one another. Some other benefits are mentioned below:
- Single click Two-Finger Authentication.
- Safer, protected, and innovative.
- Universal application for transactions.
Benefits for Customers
It is available 24 hours a day. Through UPI, you can access many bank accounts in a single app. Some more benefits are:
- The use of virtual ID is more protected. No need to share credentials sharing.
- Just One Click Authentication
- Mobile Apps can be used to raise complaints.
Registration is a UPI-enabled application
Steps for Registration
- Download the UPI app from the Banks website/App Store.
- Now, create your profile by entering details like Virtual ID (payment address), name, password, etc.
- Go to the “Add/Link/Manage Bank Account” option to link your bank account with UPI.
- Select the bank account.
- Create a new UPI PIN.
- Choose your PIN.
Change UPI PIN
- On your registered mobile number, you will receive OTP from the Issuer bank.
- Enter the last six digits of the Debit card number. Enter the card’s expiry date.
- Enter OTP and enter the UPI PIN that you like to set or that you can easily remember.
- Once you submit it, you’ll get a notification.
Performing a UPI Transaction
A. Push-sending money using a virtual address
- Log in to the UPI application.
- Once you Log in, select the “Send Money/Payment” option available.
- Enter the beneficiary’s/Payee and Virtual ID. Enter the Amount. Select the account to be debited.
- You’ll get a confirmation screen to check the details of the payment. Click on Confirm.
- Enter your ‘Mobile banking personal identification number’ (MPIN).
- You’ll get a notification of success or failure.
B. Pull-Requesting money
- Log in to the bank’s UPI application.
- Select the option of collecting money (payment request) once you have done with the process of Log in.
- Enter the payer virtual ID. Now enter the amount and select the account to be credited.
- You’ll get a confirmation screen to check the payment details. Now, click Confirm.
- The payer will get notified of the requested money.
- Payer will click the message and open his bank’s UP app to review payment requests.
- It is up to the payer whether he/she decides to pay or refuse.
- If the payer accepts the deal, he/she will enter MPIN to authorise the transaction.
- When the transaction will complete, the payer gets the message of debited while the Payee receives the message of credited.
How is UPI different from IMPS?
UPI is an arrangement that powers many bank accounts into a single mobile application. While IMPS is a service that allows fund transfer fastly within banks across India. This is not only safe but economical.
UPI provides additional benefits to IMPS in different ways. UPI provides P2P functions properly. It simplifies Merchant Payment. It is a single app for money transfers.
To know more about IMPS, click here
UPI has made everything easier for us. We can make cashless and cardless payments. It is a strong payment method which makes the transactions hassle-free for us.