What is UPI?
Unified Payments Interface (UPI) is developed by an RBI regulated body National Payments Corporation of India (NPCI). UPI payment is built on IMPS (Immediate Payment Service) mechanism for instant money transfer to other party’s bank account. Anyone with a bank account can create a virtual ID (UPI ID) which is like an email account. This unique ID helps you make payments or transfer money by your bank using IMPS.
How to use UPI?
There are 29 banks providing UPI service and soon more will be following. You need to download the app provided by your bank or provider and create a unique virtual ID. UPI Payment could also be made to your mobile number, Aadhar number, or virtual payments address. Your UPI ID is protected by 4-6 digit UPI PIN and you must always enter to authorize payments.
For example, while making UPI payment for your mobile phone on your telecom service provider website you choose UPI Payment method. You enter your virtual ID and a text message containing the authorization link will be sent. You approve the payment by entering the UPI PIN within your UPI app and payment is done instantly.
What is the benefit of UPI payment?
You don’t need to type in account number, name, IFSC Code and other required details to transfer money. It can be really cumbersome when you are typing on the phone. You need the address of receiver to transfer money provided he is a registered UPI user. NEFT transfers offered limited working period and IMPS was the alternative for speed but it lacked debit capability. UPI on other hand is fast, secure and 24×7 available.
Recently, WhatsApp payment feature popped up built on UPI payment. The feature is making lot of noise in the group of payment services. Each one of them is trying hard to get hold of user share in the market and the race is on.