UPI – Full Form (Unified Payments Interface), Registration, PIN, App

April 13, 2023

10 min read

India is on the way to becoming a cashless economy, and the Government is introducing various reforms to boost the process. The latest among them is UPI.

UPI (Unified Payment Interface) lets you pay for goods and services from wherever you are whenever you need them. All you need is a smartphone. Here, your phone acts as your debit card.

NPCI (National Payment Corporation of India) introduced UPI in 2005. Almost all financial institutions, however, refused to adopt this and it remained with just a few national banks. But it gained immense popularity as time passed by. At present, almost every bank has its own version of UPI.

What is UPI?

UPI is an advanced version of IMPS (Immediate Payment Service) from NPCI which can also be identified as your financial address. Just like your bank accounts, this UPI remains unique to every single individual and helps you transfer and receive funds with ease and speed. The best part about this is that you can actually transfer funds any time of the day, any day of the week as it is not dependent on bank holidays or specific work hours like bank transfer facilities such as NEFT, RTGS, etc. It combines all your banking facilities and features into a single package. All you require for a successful transaction are a PIN and the UPI ID.

How does it work?

With UPI, transferring money to someone is a breeze. You don’t have to remember the recipient’s account number or any such information. You need only their Aadhar number or phone number registered with a bank. You may set up a UPI ID with any app that supports it. Generally, a UPI ID starts with a mobile number and ends with the app used for it. For instance, if you use Paytm, your UPI ID will look like “95xxxxxx@paytm. To be able to avail of this facility, you will need the following mentioned 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.

Once the above assets are achieved, the next thing on the agenda is to set up your UPI ID. For that, you will need to follow the below-mentioned steps:

Choose an app that works fine on your phone.
Give your bank account information.
Type in the OTP the app sends to your device. This is a step to ensure that you are not a robot.
Enter a PIN to secure your ID.
Choose any contact from your list.
Send or receive money from that contact.

UPI essentially transfers money from the sender’s account to the receiver’s account without disclosing any bank details for either party. This is a safe mode of making transactions and one can do so at any time of the day. UPI typically work in three ways;

By scanning the QR code which is displayed on your screen
Adding the receiver’s account number and IFSC code
By entering the UPI ID of the sender or receiver respectively.

Features of UPI

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

One-time mandate

The feature lets you authorize a transaction and do it at a later date. This becomes possible with a one-time lock facility. You will have to make a one-time commitment to process your transaction at a later date. Merchants and individual users will benefit a lot from this facility. The transaction is fast, and the deduction happens automatically.

Verification of the invoice

The app dispatches an invoice to the customer online. This lets him/her inspect the order and other details that need verification. Afterward, the customer can allow the direct transfer of money to the merchant.

The facility to add your overdraft account

Until recently, users were able to link only their current and savings accounts to their UPI ID. At present, they can access their overdraft accounts and set up an automatic payment mechanism. The limit of the transaction is increased; from Rs. 100000 to Rs. 200000

Utmost security

When scanning the QR code, UPI now lets you verify the authenticity of your chosen merchant. The customer receives a notification if the merchant is an unauthorized dealer. It also is the safest means of payment. Here, you don’t share your card details. All you key in the app is your PIN (Personal Identification Number).

Advantages

The following factors set UPI above other payment gateways:

UPI	Other payment interfaces
Allows free transfer of money	Charges up to 5% for every transaction
Ideal for small transactions	Generally avoided them because of the high cost
Secures your bank account; all it requires is a PIN number.	You have to type in the entire information, including account number, IFSC Code.
Safer means of money transfer	Generally avoided cashless transactions due to security concerns.
Transfer of money, fast and simple	Takes up to 24 hours.
One app for all your bank accounts	Every account requires a separate app.
You don’t lose interest; with no middleman, the entire money gets transferred to the recipient’s account.	You lose interest depending on the app you choose.

Registration for UPI:

Registering for UPI is a breeze –

Download the BHIM app.
Create your profile with the details required.
Link your bank account with your virtual financial identifier; done.

Generating the MPIN for your UPI

Choose a bank account from where you want to conduct transactions.
The bank sends an OTP to the registered phone number.
Enter the last 6 digits of your debit/credit card and the expiry date.
Key in your OTP and the numeric MPIN you want to have.
Click “submit.”
You receive a notification of “success or decline.”
Choose “success.”

You can also use your credit card for the purpose.

Paying your bills with your UPI:

Paying bills has never been easier than when done via the UPI facility. Whether it is your utility bills, cell phone bills, grocery bills, and practically just about anything under the sun, you can do so by following these simple steps;

Log in to BHIM or any other app with your UPI.
Choose the “bill pay” section.
Go to the “biller category” Choose your service; electricity, telephone, etc.
Choose your biller and give your consumer details.
Click the “pay now” option.
Key in your UPI PIN.

How to Request Money using UPI

You can refer to the following mentioned steps to be able to request money using UPI.

Choose the “collect money” section in your UPI-supported app.
Key in the payer’s financial address.
Type in the amount.
Choose the time you want to be paid.
Click “confirm.”

Charges

UPI does not impose any charge on consumers. Even banks that use the app don’t ask for it.
At present, UPI is not considered an effective alternative to cash or credit card. NPCI is adding more and more features to it from time to time.

UPI FAQs:

1. What if I enter a wrong PIN number?

The transaction will fail. And the money will not be deducted from the account.

2. I can’t find my account in the app. What should I do?

Make sure that you have registered the same number for both the account and your virtual financial address. If this is done right, the account will definitely be registered. In case you have forgotten your password, you can reset it by clicking the ‘forgotten password’ tab and then following the steps sent to your registered email address.

3. How to pay for my online purchases with UPI?

When paying online, you will see UPI as an option. Click and follow the instructions that appear on the screen.

4. I see that money has been debited from my account. But I don’t get any confirmation. How to confirm?

You should receive a “success” notification upon completing the transaction. The app also sends an SMS to the registered mobile number. Sometimes, due to technical issues, it takes time to reflect. However, if you don’t receive any within 24 hour, contact your bank’s helpdesk.

5. In case I do not have a smart phone, can I still avail this facility?

Unfortunately, this facility is only available on smart phones. There are some applications that can also be done through the laptop but the idea of a UPI is to provide extreme convenience to make and receive payment even when on the go, hence a smart phone is necessary.

6. Can I transfer money between two of my own accounts?

Yes. In this type of payment gateway, you can transfer funds from one account to another within minutes without the worry of extra additional charges.

7. In case I have an emergency payment to be made in the middle of the night, can I do so or would I have to wait for the money to be transferred in working hours?

The greatest part about a UPI is that you can make payments at any given time of the day throughout the week as per your convenience. The receiver receives the money almost immediately and can withdraw it or make due payments as required.

8. Is there an upper limit as to how much I can transfer in one transaction?

Currently, the upper limit of making transactions is capped at Rs. 1,00,000/-. However, this is under revision and might be increased soon. Many internal banks set their own capping limits so this amount can vary.

9. How secure is it to use UPI?

UPI applications are highly encrypted and have the bandwidth to be able to facilitate numerous transactions at the same time. Currently, they handle near around Rs. 8000 crores worth of transactions on a daily basis. Furthermore, each transaction, just like the credit cards and debit cards are secured with an OTP (One time password) which is send you your registered mobile number. Only once you add this yourself, can the transaction be approved. This is by far one of the most secure ways to make financial transactions.

10. Is UPI better than using cash or credit/debit cards?

The idea behind launching this application is that the entire nation goes cashless and creates added security in making payments and additional transactions. Since it has been launched, it has created waves amidst the people and has been extensively used. It cannot completely replace credit cards and debit cards but due to updating the application on a regular basis, it can eventually replace them. In addition to this, various banks and affiliated companies are offering a whole lot of deals and freebies when making UPI transactions which are not offered when using credit and debit cards.