Full Form of UPI – Unified Payments Interface

The full form of UPI stands for Unified Payments Interface. It is a real-time payment interface developed by the NPCINPCIThe full form of NPCI is the National Payments Corporation of India which is a collective organization for all the retail payment companies in India. NPCI is set up under the guidelines of the Reserve Bank of India (RBI) and supported by Indian Banks Association.read more that facilitates instant transfer between two bank accounts. In addition, it incorporates multiple bank accounts in one interface, eliminating the need to manage multiple accounts separately while seamlessly making payments for purchases or to peers.

How Does UPI work?

UPI (Unified Payments Interface) connects multiple bank accounts using the user’s mobile number with one app. Once the user’s bank account connects with the app, the user can instantly make payments to other bank accounts from his bank account. In addition, the user gets to select the bank account he needs to use every time he makes a transfer or payment.

To facilitate UPI (Unified Payments Interface) for their customers, the banks must come on board with UPI. Therefore, customers can not use UPI if their banks have not opted to participate in the UPI ecosystem.

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Features of UPI

UPI has the following useful features:

#1 – Money Transfer Around the Clock Every Day

UPI (Unified Payments Interface) works round the clock and on all days, even bank holidays. This payment system works much better than NEFT, which has timing limitations to conduct the transactions, and IMPSIMPSThe full form of IMPS is an Immediate Payment Service. It is one of the systems used for the purpose of interbank transfer of funds instantly electronically through different channels like mobile banking, internet banking, ATM, etc. where the facility of such transfer is available whole year 24/7, including on the public holidays and weekends. read more, which requires you to handle your different accounts differently.

#2 – All Bank Accounts in One App

UPI integrates all bank accounts in one app eliminating the need to keep multiple bank apps to manage multiple bank accounts. In addition, it simplifies the payment job for users significantly.

#3 – Virtual Payment Address (VPA) to Customer

The customer gives a virtual address eliminating the need to enter the details such as account and card numbers while making payments. The money is sent or received in the user’s bank account mapped with this virtual address. Users can also send money using the QR code, which has an inbuilt virtual payment address.

#4 – Single Click 2-Factor Authentication

It provides two-factor authentication for the safety of users, merchants, and banks.

How to Register for UPI?

The user needs to follow several easy steps to register for UPI:

Step #1 – App download:

The user downloads a UPI app from the app store. There are several UPI apps available which a user can use for his banking transactions. Banks also offer UPI (Unified Payments Interface) on their apps to keep the customers hooked on to their apps. However, third-party apps are more popular than bank apps for UPI transactions.

Step #2 – Create Profile:

After downloading the app, the user creates a profile putting in his basic details like name and mobile number and picks up a virtual payment address and a password.

Step #3 – Add Bank Account:

Under this step, the user adds his bank account using his linked mobile number. To add accounts, the user should have his mobile number linked to his bank account. Users can not add bank accounts that are their own but not linked with their current mobile number.

How to Generate a UPI Pin?

  • While requesting to link his mobile number, the user gets a One time password (OTP) on his registered mobile number. Then, the user prompts to enter the last six digits and expiry date of his debit card issued by his bank.The user enters the details and the OTP. The user then enters his preferred UPI pin, which they prompt to enter twice. Once this is complete, the user’s UPI generates.

How to Perform a UPI Transaction?

What are UPI Charges and Fees?

  • Choose a Mobile Number, an Account, or a Merchant to Pay UPI payments can be made to another user using his mobile number, a bank account using the account number and IFSC, and merchants by picking the ones available on the app or scanning QR codes. Enter the Amount The user has to enter the amount he wants to transfer, or else there’s an existing bill payment due. The amount may come prefilled, and the user can change the prefilled amount before the transfer. Select the Bank Account The user gets to select the bank account he wants to make the transfer. This selection happens in the final stages of the transaction. Enter the UPI Pin The user puts in the UPI pin to make the transaction. After entering the right UPI pin, the transaction completes, and the transfer initiates, completing it within seconds.The user gets an SMS from the bank about the transaction once the payment is successful.

UPI payments can be made to another user using his mobile number, a bank account using the account number and IFSC, and merchants by picking the ones available on the app or scanning QR codes.

The user has to enter the amount he wants to transfer, or else there’s an existing bill payment due. The amount may come prefilled, and the user can change the prefilled amount before the transfer.

The user gets to select the bank account he wants to make the transfer. This selection happens in the final stages of the transaction.

The user puts in the UPI pin to make the transaction. After entering the right UPI pin, the transaction completes, and the transfer initiates, completing it within seconds.The user gets an SMS from the bank about the transaction once the payment is successful.

  • Most applications do not charge for UPI transactions on their platform.Most banks also are not charging anything to their customers for transactions.

While the transactions are free for now, banks and apps are stipulating a possible fee for the transactions. However, these charges, whenever they will come, will still be lower than many other forms of payment that are used commonly in day-to-day lives.

Is UPI Better Than Cash or Card?

UPI is essentially a digital transaction mode and is better than cash. The ability of UPI to put all bank accounts under one app also makes it better than cards. In addition, a one-click transfer without charges makes UPI a highly adoptable proposition for banks and customers alike. It is beneficial for merchants, too, as it gives them a mode to collect payments without paying transaction charges, which are the norm with debit and credit card transactions.

Conclusion

UPI is a revolutionary invention that has led to a significant change in the country’s payment ecosystem. Implemented in India, it has garnered global accolades for the ease of its operations and zero or low transaction costs.

The interface has picked up pace after the demonetizationDemonetizationDemonetization is the eviction of a particular currency/tender present in the economy from circulation and replacing it with a new currency aiming for several outcomes like the corruption-free economy, black money removal, controlling inflation, stop funding of illegal activity.read more of the Central Government and has helped solve the payment woes of people across the country. As of March 2019, 144 banks have been on UPI, facilitating transactions of a whopping ₹1.334 trillion (USD 19 billion). While the payments may look small concerning the global standard of digital payments, they are still significant for the country where mobile data adoption has started picking up as recently as 2016.

This article guides the Full Form of UPI (Unified Payments Interface) and its definition. Here, we learn how to register for UPI, generate UPI Pin, execute UPI transactions, and its features. You may refer to the following articles to learn more about finance: –

  • Full Form of INRPrepayments – ExampleFull Form of NEFTIMPS Full Form