Taking a giant leap towards making India a cashless and digital society, the much-awaited Unified Payments Interface (UPI) has finally become a reality.
Backed by the National Payments Corporation of India (NPCI), the Unified Payments Interface (UPI) is the Reserve Bank of India's latest offering — a potential game-changer for the financial sector at large.
How can you pay bills?
UPI can be called an improved IMPS system. It needs only a bank account and a smartphone to send or receive money, or to make retail purchases, without compromising on the user’s security and privacy. It has the potential to replace cash payments in everyday transacting.
For example, while settling a bill at a retail outlet, you could provide the cashier your UPI ID. The cashier will generate your bill and you will be notified either through your bank’s app or UPI’s smartphone app. Just approve the payment on the app and your work is done cashlessly.
How you can transfer funds seamlessly and instantly
Traditionally all online payments are routed through NEFT, RTGS or IMPS. A NEFT transfer requires the name of the recipient, bank account details and IFSC code of your recipient’s bank. RTGS carries large value transactions but is available for limited working hours and not on Sundays. IMPS, though instant and having longer service hours, needs the seven-digit mobile money identifier (MMID).
ARE UPI transactions safe?
The UPI is designed by the National Payments Corporation of India (NPCI) as per RBI regulations. It uses high-end encryption making transfers safe and secure. All payments require your approval on your phone, making your transactions secure.
How soon can one start using UPI?
Banks are now working to link their interface with the UPI platform. About 29 banks have agreed to partner the NPCI and more banks likely to join soon. Banks are also upgrading their mobile apps to integrate UPI to their interface. Many banks have already started offering options to create virtual IDs while others are likely to offer the service in the near future.
Transferring money with UPI
To send or receive money to or from anybody, all you need is their UPI ID. You do not need to have details such as their bank account number, IFSC codes etc. Your UPI ID will be your virtual identity designed as per your bank and phone number.
For example, if your phone number is 0123456789 and your bank is ICICI Bank, your UPI ID will be 0123456789@icici. As a sender, you have to use the UPI app or your bank app and initiate a money transfer to a recipient adding their UPI ID. The money gets credited instantly once you approve the transfer. Additionally, you can have multiple virtual addresses for multiple accounts in various banks....