What I am talking about is UPI – Unified Payments Interface. It can be used for money transfer between two bank accounts by using a smartphone.
You must be wondering what’s the big deal – well normally when you do a transaction between two banks using your smartphone, you do the following:
1. Download bank app on your smartphone
2. Login using userid and password or mobile PIN
3. You add a payee by mentioning the bank account number, branch details, IFSC code and the amount to be transferred.
The above process also needs a verification when you add a payee which is time taking.
Add to that the payee needs to remember his/her account details for him/her to receive the payment.
Enter UPI – where you are freed from the hassles of remembering a long account number and a relatively long IFSC code.
Instead, in UPI what you have is a virtual address. To make it simple for you to understand – a virtual address is something like an email address.
If you need to send some one an email, you type in the body text, put a subject and mention the email id of the recipient. That’s it!
Similarly, in UPI you need to remember only the virtual address. Bingo! Your transfer is done.
Features of UPI
Here I have mentioned some other features of UPI:
1. Instant money transfer through mobile device round the clock 24*7 and 365 days.
2. Single mobile app to access different bank accounts
3. Single click 2 factor authentication
4. Secure since no sensitive information like account number, bank branch details, IFSC code is shared
5. Merchant payments, remittances, bill payments are allowed
6. Per transaction limit is Rs 1 lakh
7. Possibility to have multiple unique virtual addresses
Broader Objectives of UPI
1. Cashless economy – reducing cash in the system and create a trail of all transaction will lead to lower tax evasion thus boosting revenue
2. Lower tax evasion would lead to lower tax rates
3. Growing use of smartphones in India will lead to larger number of transactions through mobile and electronic devices
Banks supporting UPI
It is expected that all banks will have UPI enabled on their mobile app.
As of now the following 19 banks have enabled UPI:
Bank of Maharashtra
Catholic Syrian Bank
Union Bank of India
United Bank of India
Punjab National Bank
Oriental Bank of Commerce
South Indian Bank
State Bank of India
Standard Chartered Bank India
How to Pay through UPI
We will divide it two parts –
1. Installing the App and Registering
a. For Android users, install the app from the Google Play Store. For Apple and Windows phone users, use the respective store to download and install the app.
c. From the options available, click on UPI
d. Create your virtual address and link it to your bank account
2. Making your payment
a. To transfer money to your friend or family, ask them for their virtual address
b. On the UPI screen, enter the virtual address and the amount to transfer
c. Submit the transaction
Now that you have a basic idea of what UPI is and how it works, hurry! You don’t want your preferred virtual address to be already registered by other users.
How was your first transaction experience through UPI? What did you like and what did you dislike? Do share!