Unified Payments Interface (UPI) is a revolutionary payment system that has transformed the digital payment landscape in India. UPI allows users to send and receive money instantly through their mobile devices, using just a virtual payment address (VPA) or a QR code. It eliminates the need for entering bank account details, IFSC codes, card numbers, or OTPs, making the payment process faster and simpler.
UPI is developed by the National Payments Corporation of India (NPCI), an umbrella organization for operating retail payments and settlement systems in India. It is built over the existing Immediate Payment Service (IMPS) infrastructure, which enables real-time fund transfer across banks. UPI is regulated by the Reserve Bank of India (RBI) and is interoperable with other payment systems.
Benefits over other payment methods
UPI has several benefits over other payment methods, such as:
- Convenience: You can access multiple bank accounts through a single UPI app of any participating bank or third-party service provider. You can also link your mobile number, Aadhaar number, or PAN number to your VPA for easy identification.
- Speed: You can transfer money instantly, 24×7, 365 days a year, without any delay or hassle. You can also make or request payments with a single click, without entering any additional details.
- Security: You can authenticate your transactions with a secure UPI PIN, which is known only to you. You can also change your UPI PIN anytime through the app. Moreover, your bank account details are not shared with anyone during the transaction, ensuring privacy and confidentiality.
- Cost-effectiveness: You can enjoy low or zero transaction charges for using UPI, as compared to other payment methods. The maximum charge per transaction is Rs. 2.50 plus GST, as per NPCI guidelines.
- Versatility: You can use UPI for various purposes, such as paying bills, recharging mobiles, booking tickets, shopping online, sending money to friends and family, donating to charities, etc. You can also use UPI for merchant payments by scanning QR codes or entering VPAs.
In this blog, we will explain how to use UPI for fast and secure payments, and what are the best practices to follow to avoid frauds and scams.
How to get started?
To get started with UPI, you need to follow these steps:
- Download a UPI app: You can download any UPI app from the Google Play Store or Apple App Store. You can choose from various apps offered by banks or third-party service providers, such as BHIM, Google Pay, PhonePe, Paytm, etc.
- Register on the app: You need to register on the app using your mobile number, which should be linked to your bank account. You will receive an OTP to verify your number. You also need to select your preferred language and set a login password or pattern for the app.
- Create a VPA: You need to create a VPA or a virtual payment address for your account. A VPA is a unique identifier that acts as your payment address. It is usually in the format of username@bankname or username@serviceprovider. For example, ravi@icici or ravi@phonepe. You can create multiple VPAs for different accounts or purposes.
- Link your bank account: You need to link your bank account to your VPA by selecting your bank name from the list of participating banks. The app will automatically fetch your account details using your mobile number. You need to confirm your account number and set a UPI PIN for it. A UPI PIN is a four or six-digit number that you need to enter every time you make a transaction through UPI.
How to send money using UPI?
To send money using UPI, you need to follow these steps:
- Open your UPI app and log in with your password or pattern.
- Select the option to send money or pay someone.
- Enter the receiver’s VPA or scan their QR code. You can also select the receiver from your contacts list if they have a registered VPA.
- Enter the amount and remarks for the transaction and click on proceed.
- Confirm the transaction details and enter your UPI PIN.
- Wait for the confirmation message and check your transaction status.
How to request money using UPI?
To request money using UPI, you need to follow these steps:
- Open your UPI app and log in with your password or pattern.
- Select the option to request money or collect money.
- Enter the sender’s VPA or generate your QR code. You can also select the sender from your contacts list if they have a registered VPA.
- Enter the amount and remarks for the transaction and click on proceed.
- Wait for the sender to approve your request and check your transaction status.
How to ensure safety and security of UPI transactions?
While this is a safe and secure payment system, it is also important to be vigilant and cautious while using it. Here are some tips to ensure safety and security of UPI transactions:
- Secure your device: You should always lock your device with a password, PIN, pattern, fingerprint, or face recognition feature. This will prevent unauthorized access to your device and your UPI app. You should also avoid using public or unsecured Wi-Fi networks or devices for making UPI transactions, as they may compromise your data security.
- Secure your UPI PIN: You should never share your UPI PIN with anyone, including bank representatives or UPI service providers. You should also avoid writing down your UPI PIN or storing it on your device. You should change your UPI PIN regularly and use a strong and unique combination of numbers.
- Verify transaction details: You should always verify the transaction details before authorizing any UPI transaction. You should check the receiver’s VPA, the payment amount, and the purpose of the transaction. You should also be careful of any unexpected or suspicious requests for payments and cross-check with the intended recipient before proceeding.
- Be wary of phishing attempts: Any emails, messages, or calls from your bank or UPI service provider requesting your personal or financial information or UPI PIN should be avoided. These may be phishing efforts to steal your information or make fraudulent transactions. Never click on dodgy websites or give unknown sources your information. You should also verify any correspondence with your bank or UPI service provider.
- Monitor your account activity: UPI apps and bank statements should be used to track account activity and transactions. Unauthorised or suspicious transactions should be reported to your bank or UPI provider immediately. You should also check your transaction alerts and notifications against your records.
Conclusion
UPI is a convenient and efficient way to make fast and secure payments through mobile devices. It offers several benefits over other payment methods, such as convenience, speed, security, cost-effectiveness, and versatility. To use UPI, you need to download a UPI app, register on it, create a VPA, link your bank account, and start transacting. To ensure safety and security of UPI transactions, you need to follow some best practices, such as securing your device and UPI PIN, verifying transaction details, being wary of phishing attempts, and monitoring your account activity.