Find out what UPI means, how you can use it and where to register for it.
The emergence of fintech has made banking much more accessible and convenient. Bank cash counters are no longer crowded as cash withdrawal, and deposit is now just a few clicks away. The adoption of tech for banking and payment through apps has made real-time fund transfer quick and hassle-free. One such application is UPI. According to a report, around 2.3 billion transactions were recorded in February 2021 using UPI in India. Since it was first launched in 2016, UPI transactions have grown over 70% on a year-on-year basis. All this information is evidence of the ever-growing popularity of UPI. Let us find out what is UPI in this article.
UPI means Unified Payment Interface. It is an application that runs on internet-enabled smartphones. Developed by the National Payments Corporation of India, UPI is a real-time, single-window payment application. In simple words, UPI means a payment interface that allows you to transfer funds from one bank account to another bank account in real-time. With UPI, you do not need to collect or share your sensitive bank information such as your account number, IFSC, bank branch and bank name every time you wish to transfer money. At present, almost all banks in the country are a part of the UPI network.
You can use the UPI platform to transfer money to your family members, friends, colleagues, acquaintances, or practically anyone with a UPI ID. The system directly transfers money to their bank account. Similarly, you can receive funds in your bank account by simply sharing your UPI ID. UPI essentially allows you to transfer funds safely, securely, and seamlessly without revealing any bank-specific information.
UPI (Unified Payments Interface) links multiple banks on a single platform for instant fund transfers. Users create a UPI ID (virtual payment address) instead of sharing bank details.
Transaction flow:
UPI uses end-to-end encryption and two-factor authentication for security. It Works 24x7 for peer-to-peer, merchant, and bill payments via the IMPS network.
A UPI PIN is a 4- or 6-digit personal identification number that authenticates transactions through the UPI platform. It acts like a password, ensuring that only the account holder can approve payments. Every UPI transaction requires entering your UPI PIN, which keeps your funds secure even if someone gains access to your mobile device.
Generating or resetting a UPI PIN is simple and can be done via your UPI-enabled banking app:
Step 1: Open your bank’s UPI app and select the account you want to link.
Step 2: Choose the option to generate or reset your UPI PIN.
Step 3; Enter your debit card details, including the expiry date.
Step 4: Set a new 4- or 6-digit UPI PIN and confirm it.
Step 5: Your UPI PIN is now ready for secure transactions.
To find your UPI ID, follow these simple steps:
Step 1: Open your UPI-enabled banking app.
Step 2: Go to the UPI or profile section.
Step 3: Locate your UPI ID / Virtual Payment Address (VPA).
Step 4: If needed, create a custom UPI ID.
Step 5: Share your UPI ID to receive payments securely.
UPI offers a fast, secure, and convenient way to manage digital payments. Its key UPI features include instant money transfers, round-the-clock availability, and direct access to funds in your Savings Account Online. Whether for personal use or business, the benefits of UPI simplify transactions, reduce reliance on cash, and make financial management seamless.
You can use the UPI application for payments and receipts of funds. Find out how below:
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Before you can start using it, you need to register as a UPI user by following these easy steps.
That is all you need to do. You can now use your UPI application
Now that you know what is UPI payment and how useful it can be, you should consider downloading a UPI-enabled app on your mobile phone. UPI is changing the way payments are made, thereby reducing the dependence on bank systems for all kinds of fund transfers. It has streamlined transactions easy, making them both easy and secure. If you often use your online banking facility and send or receive money online, UPI application suits can help you.
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*Disclaimer: This article is for information purposes only. We recommend you get in touch with your income tax advisor or CA for expert advice.