Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. It also caters to the “Peer to Peer” collect request which can be scheduled and paid as per requirement and convenience. Each Bank provides its own UPI App for Android, Windows and iOS mobile platform(s).


Launched in 2016, United Payments Interface (UPI) is a payment system that facilitates transfers between bank accounts via smartphone. Without the hassle of entering credit card details or banking passwords, customers can transfer funds directly from their own accounts to peers and merchants.

A product of the National Payments Corporation of India (NPCI), UPI’s goal is to move India toward a cashless economy. By allowing smartphones to double as debit cards, UPI is poised for astronomical growth. India is currently home to 780 million feature phones and only 120 million smartphones. As this percentage shifts in the coming years, cashless systems like UPI will increase market share.

How Does UPI Work?

Hailed by many as one of the most sophisticated public payments infrastructures in the world, UPI provides merchants with virtual addresses free of sensitive personal information. Similar to an email address, consumers can use this unique ID to transfer money or make payments to any merchant, person or bank.

Most payment systems require an account number, account type and bank name, but with UPI, no account details are required. Payments also happen in real time, 24-hours a day, so users no longer have to wait hours for payments to go through.


How to get it:

  • Bank a/c
  • Mobile number should be linked with bank a/c
  • Smart Phone with internet facility
  • Debit Card for re-setting MPIN.


Service Activation:

  • Download the App for UPI
  • Do registration online on the App with a/c details
  • Create a virtual ID
  • Set MPIN
  • 5-7 minutes


What is required for Transaction:

  • Smartphone with internet facility
  • Registered device only
  • Use registered MPIN
  • Self Service Mode


Transaction Cost:

  • NIL to customer by most Banks
  • Customer pays for data charges


Services Offered:

  • Balance Enquiry
  • Transaction History
  • Send / Pay Money
    • Virtual Address
    • A/c no. & IFSC code
    • Mobile no. and MMID
    • Aadhaar (to be made functional)
  • Collect Money
    • Virtual Address
  • Add bank account
  • Change / Set MPIN
  • Notifications
  • A/c Management


Funds Transfer limit:

1 lakh / transaction


Who developed UPI?

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.

What is MPIN?

An MPIN is given to a banking customer once they register for Mobile Banking support. Chances are you have one already, but have never used it.

How does one make a payment transaction?

Consider that you are trying to book tickets online for a film via your mobile.

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.

Pros of UPI

  • Facilitate Person to Business (P2B) transactions via collect payment option. This would boost business and Indian Economy overall.
  • UPI will bring down cash circulated in the economy (currently cash in circulation is 12% of GDP).
  • UPI will bring down annual cost of currency transactions (currently around Rs. 20000 crores)


Cons of UPI

  • 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 theWallet Companies.
  • The per transaction limit of Rs.1 lakh may not go well with all customers/business.


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