Finance

Unified Payments Interface – All you need to know

After demonetisation, the focus was on digital payments, especially payments made through your mobile phone. To simplify this process, the National Payments Corporation of India (NPCI) introduced a seamless fund transfer mechanism called Unified Payment Interface (UPI). Unified Payment Interface allows transfer of money between two bank accounts using the sender and recipient’s smartphone.

The UPI payment system works using the Instant Payment System or IMPS form to debit money directly from the sender’s bank account and deposit money directly into the receiver’s bank account. Transacting via Unified Payment Interface does not require bank account and IFSC code to operate. This makes it simpler to manage payments.

How is it different from other payment methods?

UPI can be used to pay money to individuals and also to merchants who accept UPI payment for their goods and services. Presently, if you want to make a payment to anyone, you need his or her bank account details along with the IFSC code of the branch. This sensitive information has to be given out repeatedly to receive payments. The UPI payment system eliminates need for using a bank account and IFSC code.

Under Unified Payment Interface, you can create a unique ID by linking your email, bank account number and IFSC code. This ID will be unique to you, since it is a combination of your name, and the name of the bank. You can choose the name that will appear in your ID, thus avoiding duplication.

If you want to make payments using UPI, you just have to share your UPI ID with the person. There is no need to share sensitive banking details.

How can I start with UPI:

To begin using Unified Payment Interface, you need to download the BHIM app. Most banks also have their own BHIM apps, for example, HDFC, ICICI, Axis Bank, SBI, etc. have linked to BHIM. There are other apps such as Google’s Tez, PhonePe etc, which also work on the UPI payment system.

To begin using the UPI app, you need to register. While registering, you need to create a unique UPI ID. This ID will be linked to your email account and is editable. You can choose whatever you want this ID to be and it will be linked to your bank.

After this registration is done, you will need to set a UPI pin. This pin will be used to confirm transactions before they are executed.

How do I make a payment?
To make a payment, you click on ‘Make A Payment’ in the app. To make a payment, add the UPI ID of the recipient and confirm with your PIN. The money gets transferred automatically and immediately to the recipient’s account.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s