What is UPI and How Does It Work?

Sun, 28 Mar 2021 07:14:23 +0000

The Buyt Desk

Unified Platform Interface (UPI) is a type of cashless digital payment system that helps transfer money instantly from one bank account to another using your mobile phone. This service is available 24X7 and without any charges. The National Payments Corporation of India (NPCI) developed Bharat Interface for Money (BHIM) app in 2016 to facilitate online retail payments through UPI. In 2018, NCPI released another version, UPI 2.0. NPCI is under the control of the central bank, the Reserve Bank of India. UPI may be understood as advanced IMPS (Immediate Payments Service) system that is easier to use and less costly. You can create a UPI ID or Virtual Payment Address (VPA) through the BHIM app. The VPA is directly connected to your bank account. At the time of registration, you create the UPI PIN (Personal Identification Number) that is used to authorize every bank transaction in the future. Eventually, banks and private players also started supporting UPI. A VPA created on the bank or private company PSP (Payment Service Provider) app can also be used on the BHIM app. NPCI certifies the PSP app, which can provide a UPI ID/VPA.

Features of UPI and UPI 2.0

UPI is a highly secure payment system as it transfers money using a mobile number but retrieves the bank account details in a masked manner.
It is available on both the Android operating system and iOS.
UPI had a daily transaction limit of Rs.1 lakh. However, the limit was increased to Rs.2 lakhs for UPI 2.0.
With UPI, you could link saving and/or current accounts with your VPA. However, with UPI 2.0, you can link even the overdraft account with your VPA.
You can link more than one bank account with a particular UPI ID/VPA. Moreover, you have the liberty to use more than one PSP app on the same mobile phone and use the same or different VPA on them.
You do not need to register the beneficiary’s bank account for sending money as is required for NEFT.
Earlier, discrepancies were reported between the payment and invoice of the purchase. UPI 2.0 has improved features like prior verification of the invoice before making the payment. In addition, it allows both the buyer and the seller to pre-authorize payment for a future date.
You can link only a bank account to a UPI ID. Neither a debit/credit card nor a mobile wallet can be linked to the UPI ID.
Either the payer or the receiver can initiate a bank transaction via UPI.

How to set up a UPI ID?

Follow the steps to set your UPI ID:

Download a PSP app. Banks have their own specific UPI apps. You can also use the public UPI app – BHIM – or private UPI-enabled apps like PhonePe, Paytm, or GPay, etc.
Register with the app using the mobile number that is linked to your bank account.
To verify your mobile number and the bank account, an OTP will be sent via SMS on your phone.
As soon as you enter the OTP in the UPI app, you will receive a prompt to set your UPI PIN.
Next, you have to select the bank with which lies your account. Now, you can transfer money to another bank account without sharing your bank account details.
A UPI payment can be made by using any of the following:

UPI ID/VPA
Mobile number
QR code
Aadhaar number
Account number and IFSC

UPI is a big step towards the goal of Digital India. It is quite easy for the user to make instant payments via UPI ID in a secure manner. This payment service reduces the chances of fraud. Do create your UPI ID and transact instantly through any of the available numerous PSP apps.

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5 Rules to Make Your UPI Transaction Safer

Mon, 02 Nov 2020 10:54:41 +0000

By Priyanka Sambhav

The Unified Payment Interface, i.e. UPI transaction, recorded a new high in October 2020. According to National Payment Council of India’s(NPCI) latest report, the number of UPI transaction has crossed a crucial milestone 200 crore, and these transactions were worth Rs 3.86 lakh crore. UPI transaction gained momentum and saw more massive adoption in the wake of COVID 19 lockdown. People prefer digital mode of payment. In October 2019, UPI crossed 100 crore transaction mark for the first time, and within a year its usage has doubled. So has the scale of transaction which was Rs 1.91 lakh crore last October.

With an increase in the number of users and many being first-time users, UPI becomes an easy target of online fraud too. The UPI app connects to your bank account and gives you the option of easy transfer of funds from different bank accounts. This can be a dangerous affair in case a Scamster manages to breach the security; he can very quickly empty your account.

It is very important to be extra cautious and mindful while using UPI. Here is a list of 5 most important things to watch out for, while handling UPI-

1.First UPI Rule: Beware of too good to be true deals

Be wary whenever making a payment to a new entity. Double-check the identity of the person or outlet where you will be making a payment before heading for a UPI transfer. It could be a restaurant whose number you picked up from any open web source. They could offer you a discount or a deal which may look too good to be true then it could be a false trap.

2. ‘PIN’ Rule of UPI: PIN for debits only not credit

For receiving money on UPI, you don’t require a PIN. Only while making a payment you need to enter the PIN. Always remember that if money has to be credited to your account, then you NEVER have to punch in your PIN. It is the sender who has to use the PIN. Fraudsters have been found to be misusing ‘request money’ in many cases. They pretend to be the buyer of product from you which you have posted online and on the pretext of sending money they would ask you for your PIN.

3.Never share your bank and card details rule

Never share your bank account number and debit/ATM card details with a stranger. These details could be easily used to create a Virtual Payment Address (VPA) ID of your UPI account and reset MPIN to do transactions.

4.Say No to clicking on emails with links rule

Do not click on links sent to you from an unknown source. Be mindful when you have to choose between ‘PAY’ and ‘DECLINE’. If an unknown source is sending a message to pay you and asking you to click the link and then press ‘PAY’, the obvious-sensible question is-to receive some, y should you press ‘PAY’?

5.Careful of Counterfeit apps

Many malicious or fake apps are doing the round at all times. These fake apps look very similar to the actual one and may fool you to download it. These fraud apps can steal your data and misuse it. So before downloading UPI app do check the source of the app and visit the official website of NPCI and understand the features well before downloading it.

Hopefully, these five suggestion helps you to make a safer transaction. Be safe and be alert.