UPI was developed by National Payment Corporation of India (NPCI) under the guidelines of RBI. UPI is based on the Immediate Payment Service (IMPS) platform.
Sending money on the UPI is called a “push.” In order to send money, the user logs into the interface and selects the Send Money/Payment option. After entering the recipient’s virtual ID and the amount desired, he chooses the account from which the money will be debited. The user then enters a special personal identification number (PIN) and receives a confirmation.
Receiving money through the system is called a “pull.” Once the user has logged in to the system, she selects the option to collect money. The user then needs to enter the virtual ID for the remitter, the amount to be collected, and the account in which she will deposit the funds. A message then goes to the payer with the request to pay. If he decides to make the payment, he enters his UPI PIN to authorize the transaction.
Once the transfer has been completed, both the sender and the recipient receive a confirmation by text message to their smartphones.
A Unified Payment Interface (UPI) is a smartphone application that allows users to transfer money between bank accounts. It is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI). It eliminates the need to enter bank details or other sensitive information each time a customer initiates a transaction.
Steps to start using UPI
UPI is now publicly available. Check if your bank has released an updated mobile app with UPI support already.
- Download the UPI app of your bank from Google Play Store/Apple Apps Store and install it in your phone.
- Set app login.
- Create a Virtual Payment Address (VPA). Eg: Roychoudary@icici
- Add your bank account.
- Set MPIN.
- Start transacting using UPI.
Payment
When you click to buy, the mobile website/ mobile app you used will trigger the UPI payment link. Now, you are taken to the pay screen of the UPI app. Here, the transaction information is verified and a click followed by entry of a secure PIN completes the purchase. Merchant payments, remittances, bill payments among others.
Limitations
- Refunds are currently not part of UPI and the authority for all arbitration lies with NPCI.
- The introduction of UPI is most likely to badly affect the Wallet Companies.
- The per transaction limit of Rs.1 lakh may not go well with all customers/business.