What Is UPI Payment?

UPI payment is a single-window interface that allows you to transfer money between bank accounts. This will enable you to send or receive money or scan a quick response (QR) code to pay an individual, trader, or service provider to shop, settle bills, or authorize payments.

It is a simple, free, and instantaneous mode of payment. UPI permits you to conduct transactions 24/7, 365 days a year. The National Payments Corporation of India (NPCI), the umbrella organization that supervises retail payment systems in India, created UPI in 2016. The NCPI is governed by the Reserve Bank of India.

How Does UPI Work?

UPI has simplified the money transfer process significantly. You do not need to memorize the account number, account type, IFSC, or receiver’s bank name. Instead, you can only transfer money if you know their mobile phone number or UPI ID, which is linked to their bank account. A UPI account can be created in these simple steps:

To take advantage of cashless payments and instant money transfers via UPI, you’ll need two things: a mobile phone and a bank account with a UPI-member bank. Your mobile phone number must be included in your bank account details. As of today, the majority of banks in India are members. Currently, 216 banks accept UPI.

The next step is to install any UPI-compatible app on your smartphone like Paytm, SBI Pay, BHIM, PhonePe, MobiKwik, Google Pay, Uber, and BOB UPI. Once you complete the download, the app will prompt you to create a virtual ID (identity). This is your one-of-a-kind ID for making or receiving UPI payments. The bank will send a one-time password (OTP) to your mobile number to confirm your account

After the verification process is complete, you can create your Virtual Payment Address (VPA). The Virtual Payment Network (VPN) is similar to an email address and is unique to you, such as abc@arjunbank. Your VPA unlocks the enormous benefits of UPI transfers and payments.

Benefits of Using UPI

After explaining what UPI payment is, let us look at its advantages. Considering the benefits listed below, using UPI for daily transactions can be extremely beneficial.

• It is a quick, easy, and inexpensive method of money transfer that can be done from anywhere and anytime. Using your smartphone, you can instantaneously transfer money.
• You can link all of your accounts to this one ID on the UPI app and use it for various purposes, such as settling your utility bills or shopping at your local supermarket.
• UPI also removes the risk associated with carrying cash every time because it plays the double role of a digital wallet. You don’t need to share, store, or recollect any delicate bank details.
• Even using ATMs is not needed, let alone having to cash cheques. Scan the QR code to make both online and offline transactions.
• You can receive funds by sharing your UPI ID, the mobile number you registered with your bank.
• Opening the app requires a single tap with only two-factor authentications and your UPI ID to complete a purchase.
• You can make client payments by using this app’s collect payment option, and there is no need to enter the recipient’s banking information when transferring funds.
• It enables real-time cash settlement.
• Any payment complaints you have can be lodged directly through the UPI app.

Is UPI Payment Secure?

Following the devastation caused by the COVID-19 pandemic, contactless payments via the Unified Payment Interface (UPI) have become the chosen method of transaction for people. As the UPI payment is a highly convenient method of cash transactions, several individuals are concerned about its security. UPI is secure. However, to avert cybersecurity risks, you should exercise caution when making online payments. It is safe for the reasons listed:

• During the initial registration, mobile number verification binds your UPI account to your number, making it a point of identification. If you change your phone number, you must restart the verification process.
• During business transactions, when you sign up for the UPI, you can choose between a 4-digit and a 6-digit mobile pin, known as the MPIN. Once you create it, the MPIN can authenticate each payment.
• Safety During Authentication of Other Parties: Another feature built into the UPI system allows you to verify the integrity of traders, thereby ensuring no fraud.

Final Thoughts

With this knowledge, you should consider downloading a UPI-enabled app to your phone. UPI is transforming how payments are made, eliminating reliance on bank infrastructure. It has made transactions safe and straightforward. If you frequently use online banking and transfer or receive money, UPI apps may be useful. UPI is safe and easy to use. The NPCI predicts that the number of UPI users will reach 500 million in the coming decade.