Unified Payments Interface
Unified Payments Interface (UPI) is a real-time payment system developed by National Payments Corporation of India (NCPI) to facilitate inter- bank transactions. It is simple, secure and instant payment facility. This interface is regulated by the Reserve Bank of India and used for transferring funds instantly between two bank accounts through mobile (platform) devices. http://www. npci.org.in/
Unlike traditional e-wallets, which take a specified amount of money from user and store it in its own account, UPI withdraws and deposits funds directly from the bank account whenever a transaction is requested. It also provides the “peer to peer” collect request which can be scheduled and paid as per requirement and convenience.
UPI is developed on the basis of Immediate Payment Service (IMPS). To initiate a transaction, UPI applications use two types of address - global and local.
● Global address includes bank account numbers and IFSC.
● Local address is a virtual payment address.
Virtual payment address (VPA) also called as UPI -ID, is a unique ID similar to email id (e.g. name@bankname) enable us to send and receive money from multiple banks and prepaid payment issuers. Bank or the financial institution allows the customer to generate VPA using phone number associated with Aadhaar number and bank account number. VPA replaces bank account details thereby completely hides critical information.
The MPIN (Mobile banking Personal Identification number) is required to confirm each payment. UPI allows operating multiple bank accounts in a single mobile application. Some UPI application also allows customers to initiate the transaction using only Aadhaar number in absence VPA
UPI is also available as an Unstructured Supplementary Service Data (USSD) service. Users who don’t have Internet can dial *99# and get UPI services within India. The financial services like transferring fund, payment request and non-financial services like changing MPIN and balance check are currently available through the USSD.
● Immediate money transfers through mobile device round the clock 24 x 7.
● Can use single mobile application for accessing multiple bank accounts.
● Single Click Authentication for transferring of fund.
● It is not required to enter the details such as Card no, Account number, IFSC etc. for every transaction.
● Electronic payments will become much easier without requiring a digital wallet or credit or debit card.