All you need to know about UPI

India is on the verge of becoming a cashless economy, and the government is enacting a slew of changes to help it along. UPI is the most recent addition to the list.

UPI full form is Unified Payment Interface and it allows you to pay for goods and services from anywhere at any time. All you need is a smartphone to get started. Your phone serves as a debit card in this scenario.

In 2005, NPCI (National Payment Corporation of India) launched UPI. Almost all financial institutions, on the other hand, declined to embrace it, leaving only a few national banks to do so. However, as time progressed, it grew in popularity. Almost every bank now offers its own form of UPI.

What is UPI?

UPI is a more advanced version of the National Payments Corporation of India’s (NPCI) IMPS (Immediate Payment Service), which may also be used to identify your financial address. This UPI, like your bank accounts, is unique to each user and allows you to send and receive funds with ease and speed. The best thing is that you can transfer cash at any time of day, any day of the week because it is not dependent on bank holidays or specific working hours like bank transfer capabilities like NEFT, RTGS, and so on. It brings together all of your banking services and features into one convenient package. A PIN and the UPI ID are all that is required for a successful transaction.

How does it work?

Transferring money to someone is simple with UPI. You don’t need to keep track of the recipient’s account number or any other details. You only need their Aadhar number or a bank-registered phone number. Any software that accepts UPI ID can be used to create one. In most cases, a UPI ID begins with a mobile number and finishes with the app that was used to create it. If you use Paytm, for example, your UPI ID will be something like “95xxxxxx@paytm.” To take advantage of this service, you will require the following assets:

  • A smartphone
  • An active bank account
  • Netbanking facilities activated with the bank account 
  • An active cell phone number that is linked to your bank account
  • A good internet connection and/or data plan.

After you’ve acquired the abovementioned assets, the following step is to create your UPI ID. You’ll need to take the following steps to accomplish this:

  • Choose an app that runs smoothly on your device.
  • Give the details of your bank account.
  • Fill in the OTP sent to your device by the app. This is a precautionary measure to check you are not a robot.
  • To protect your ID, enter a PIN.
  • Select any contact from your contact list.
  • Money can be sent or received from that contact.

UPI sends money from the sender’s account to the receiver’s account without revealing either party’s bank account information. This is a secure method of conducting business that may be done at any time of day. UPIs usually work in one of three ways:

  • Scanning the QR code that appears on your screen.
  • Including the account number and IFSC code of the recipient
  • By entering the sender’s or receiver’s UPI ID, accordingly.

Features of UPI

NPCI updates UPI as per the demands of time. And version 2.0 offers the following features:

  • One-time mandate

This feature allows you to authorise a transaction and complete it later. A one-time lock facility makes this possible. You’ll need to make a one-time commitment to complete your transaction later. This capability will be extremely beneficial to both merchants and individual users. The transaction is quick, and the deduction occurs on its own.

  • Verification of the invoice

The programme sends an invoice to the customer via the internet. This allows him to inspect the order as well as any other information that need to be verified. After that, the consumer can authorise a direct money transfer to the merchant.

  • The facility to add your overdraft account

Users could only link their current and savings accounts to their UPI ID until recently. They can now access their overdraft accounts and set up an automatic payment system. The transaction limit has been raised from Rs. 100000 to Rs. 200000.

  • Utmost security

UPI now allows you to check the validity of your chosen merchant by scanning the QR code. If the merchant is an unlicensed dealer, the buyer is notified. It is also the most secure method of payment. You don’t give up your credit card information here. All you have to do is enter your PIN into the app (Personal Identification Number).

UPI Advantages

Following factors set UPI above other payment gateways:

UPIOther payment interfaces
Allows free transfer of moneyCharges up to 5% for every transaction
Charges up to 5% for every transactionGenerally avoided them because of the high cost
It only takes a PIN number to protect your bank account.You must put in all of the details, including the account number and IFSC code.
Money transfer methods that are more secureCashless transactions were generally avoided due to security concerns.
Money transfer, quick and easyIt could take up to 24 hours.
All of your financial accounts are in one app.A different app is required for each account.
You don’t lose interest because there is no middleman and the money is paid directly to the recipient’s account.Depending on the app you use, you will lose interest.

Registration for UPI

It’s simple to sign up for UPI –

  1. Install the BHIM app.

2. Fill up the blanks in your profile with the necessary information.

3. Connect your bank account to your virtual financial identification and you’re good to go.

Generating the MPIN for your UPI

  • Select a bank account from which you’d like to make transactions.
  • An OTP is sent by the bank to the registered phone number.
  • Enter your debit/credit card’s last six digits as well as the expiration date.
  • Enter your OTP as well as the number MPIN you’d want to use.
  • “Submit” should be selected.
  • You get a “success or decline” notification.
  • Select “success.”

You can also make use of your credit card for this.

Paying your bills with your UPI:

Paying bills has never been simpler than with the UPI service. You can do so by following these simple steps for your utility bills, mobile phone bills, supermarket bills, and nearly everything else under the sun.

  • Use your UPI to log in to BHIM or any other app.
  • Select “bill pay” from the drop-down menu.
  • Go to the “biller” section. Select your service, such as power, telephone, and so on.
  • Choose your biller and enter the information for your customer.
  • Select “pay now” from the drop-down menu.
  • Enter your UPI PIN here.

How to Request money using UPI

You can use UPI to make a money request by following the steps listed below.

  • In your UPI-enabled app, go to the “collect money” area.
  • Fill in the financial address of the payer.
  • Enter the amount.
  • You can choose when you wish to be paid.
  • “Confirm” should be selected.


Consumers do not pay a fee to use UPI. Even the banks that use the app do not request it.

UPI is currently not seen as a viable replacement to cash or credit cards. From time to time, NPCI adds more and more functionality to it.


1. What happens if I type in the erroneous PIN number?

The transaction will be unsuccessful. Furthermore, the funds will not be debited from the account.

2. In the app, I can’t find my account. So, what should I do now?

Check to see if you’ve used the same phone number for both your account and your virtual financial address. The account will undoubtedly be registered if everything is done correctly. If you forget your password, go to the ‘lost password’ tab and follow the instructions issued to your registered email address to reset it.

3. How do I use UPI to pay for my online purchases?

When making an online payment, UPI will appear as an option. Click on the directions that appear on the screen and follow them.

4. I see that my bank account has been debited. However, I receive no confirmation. What is the best way to confirm?

Upon completion of the transaction, you should receive a “success” notification. In addition, the software sends an SMS to the registered phone number. It can take some time to reflect owing to technical issues. If you haven’t received any within 24 hours, call your bank’s customer service department.

5. Can I still use this service if I don’t have a smart phone?

Regrettably, this feature is only available on mobile phones. Some apps can be completed using a laptop, but the purpose of a UPI is to enable great convenience in making and receiving payments while on the go, a smart device is necessary.

6. Is it possible for me to move funds between two of my own accounts?

Yes. You can move funds from one account to another in minutes using this form of payment gateway without incurring any additional fees.

7. Can I make an emergency payment in the middle of the night, or will I have to wait for the money to be transferred during business hours?

The best thing about a UPI is that you may use it to make payments at any moment during the day, on any day of the week. The money is delivered to the receiver practically instantly, and he or she can withdraw it or make required payments.

8. Is there a maximum amount I can transfer in a single transaction?

Currently, the maximum amount that may be transacted is Rs. 1,00,000/-. However, this is currently being reviewed and may be increased in the near future. This amount can vary because several internal banks set their own capping limitations.

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