Unified Payment Interface (UPI) is a payment system launched by the National Payments Corporation of India (NPCI). It was developed to facilitate easy transfer of money among bank accounts with a mobile app or UPI-enabled payment gateway.
It will be a single window for all transactions like fund transfer, merchant payments, peer-to-peer payments and bill payments.
UPI is an interoperable payments platform. That means it allows you to send and receive money from any bank account without having to worry about IFSC codes or bank names. You can also use UPI as an online payment method on websites that have implemented it.
UPI allows you to send money to anyone with a bank account in India, even if they are not on your contact list or registered with your bank account. The receiver doesn’t have to be registered with your bank account and doesn’t need to have downloaded any app or opened an account with any particular bank either!
Unified Payment Interface is all the rage now. It has crossed over 1 billion transactions in November 2019 and plans to expand to global markets by 2020. For those who do not know what UPI is and how UPI payment works, this article will help you understand everything there is to know.
What is UPI?
Unified Payment Interface (UPI) is a payment system that allows users to make and receive payments electronically through their smartphones. It was launched by the National Payments Corporation of India (NPCI) in 2016 as an alternative to cash payments and has since taken off with over 1 billion transactions in 2019 alone.
UPI was introduced as an e-wallet on the mobile phone but later got integrated into other apps.
How does UPI work?
UPI works on the concept of Virtual Payment Address (VPA), which is a unique identifier assigned to every user who wants to make or receive payments through UPI Scan. The address can be shared with other users who can then send payments directly from their bank accounts using this address without having to know any other details about each other except for their VPA number.
How can I pay using UPI online?
Download the UPI app from your bank. In fact, you can download any bank’s UPI app, it need not be your own bank. Your bank has to support such payments. Currently, 29 banks are a part of this payment mode.
Once you have downloaded the app on your phone and logged in with your credentials, enter the desired amount to be transferred in the ‘Send Money’ section on your app’s home screen.
After entering the amount, type in the name or mobile number of the recipient in the ‘Receiver Name/ Mobile No’ field at the bottom. Then, tap on ‘Next’ to proceed further.
You will now see an option to choose a payment method — either through linked cards or through UPI PIN (if you have set one). Tap on whichever method you wish to use for making payment and proceed further by tapping on ‘Next’ again.
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