Navigating the maze that is personal finance

Sunday, 25 December 2016

What is Unified Payments Interface (UPI)?

Going digital is the need of the hour. Though net banking and credit cards have been in market for quite some time now, they have been limited to people who have access to net and are tech-savvy. With the digital push by Indian Government new modes and methods of payments are being developed to ease out payments.

Recently mobile wallets got a huge push after demonetization about which I have already talked in one of my earlier blogs. UPI is one such application which has been recently launched and further simplifies the digital payments while securing your details at the same time.

Here’s a sneak peek into what exactly Unified Payments Interface or UPI is and how it works.   

What is it?
Unified Payment Interface allows transfer of money both online and offline from one bank to another or for making any other payments, using a bank’s own app. It precludes use of credit card details or filling IFSC codes or any other bank account number.

Once you have registered yourself after downloading the app of the bank where you have the account, you are provided with the M-pin (or mobile pin for mobile banking support) and you are ready for transactions up to 1 lakh rupees.

How does it work?
You create a virtual payment address - for example rahul@icici – linked to your account. This is the only information visible to the other party thereby protecting your sensitive information such as account number.

How do I register and initiate a UPI transaction?

Creating virtual address
  • Download UPI app from app store or banks website - the list of UPI enabled banks and their apps can be seen below.
  • Create profile by adding name virtual ID and password that you would like to use.
  • Go to “manage account” and link your bank and account number to your virtual ID

Generating M-Pin
  • If you have registered more than one bank account then select the account from which you want to proceed for transaction.
  • Click on the option “Generate M-Pin.”
  • You receive a one time password (OTP) on your mobile (registered).
  • Using the OTP enter the last six digits of your debit card and its expiry date.
  • Choose the M-pin that you would like to use and submit.
  • You get a notification of successful registration.

To make payments
  • Login to UPI app and select send money.
  • Enter the payee (person who will receive money) details like his/her virtual ID and amount to paid ( i.e. to be debited from your account).
  • You get a screen with details of payee and transaction amount, confirm it.
  • Enter your M-Pin to carry out transaction and you receive a notification regarding transaction.

Pull transactions (to generate request for payments)
  • Customer to merchant or between merchants, this button can be used to generate a payment request.
  • Once you have logged in you select an option of collect money (to be credited to your account).
  • You enter the payers virtual ID and amount to be collected.
  • The payer gets a notification on his/her mobile a request for payment.
  • This can be either allowed or declined. In case it is accepted the payer has to enter his/her M-PIN to complete the transaction.
  • Payer gets a notification of debit while payee receives notification of credit to her/his account.

What are the benefits of using UPI?
UPI allows a single platform for accessing multiple bank accounts and allows seamless transaction between participant banks utilizing the existing infrastructure.It allows 24 hour transactions at your convenience. You can make payment of utility bills, over the counter payments, bar code based payments, cash on delivery payments, in app payments, online payments, donations etc. and can also generate a pay request to another party which can the make payments. It is extremely safe as your details are not revealed to the other party. Since it does not involve the use of a card, it can be easily used by large section of population.

List of banks that offer UPI services and a link to UPI enabled apps.
As of date there are 33 banks that offer UPI based transaction services. Of these 27 have their own apps. The list of these 27 banks is given below.


Sl.No.

Bank Name

App Name

1

Allahabad Bank

Allahabad Bank UPI

2

Andhra Bank

Andhra Bank ONE

3

Axis Bank

Axis Pay

4

Bank of Baroda

Baroda MPay

5

Bank of Maharashtra

MAHAUPI

6

Canara Bank

Canara Bank UPI - Empower

7

Catholic Syrian Bank

CSB UPI

8

Central Bank of India

Cent UPI

9

DCB Bank

DCB Bank

10

Federal Bank

Lotza

11

HDFC Bank

HDFC Bank MobileBanking

12

ICICI Bank

Pockets- ICICI Bank

13

IDFC Bank

IDFC Bank UPI App

14

IndusInd Bank

Indus Pay

15

Karnataka Bank

KBL Smartz

16

Kotak Mahindra Bank

KayPay

17

Oriental Bank of Commerce

OBCUPI PSP

18

Punjab National Bank

PNB UPI

19

RBL Bank

RBL Pay

20

South Indian Bank

SIB M-Pay (UPI Pay)

21

State Bank of India

SBI Pay

22

TJSB Bank

TranZapp

23

UCO Bank

UCO UPI

24

Union Bank of India

Union Bank UPI

25

United Bank of India

United UPI

26

Vijaya Bank

Vijaya UPI App

27

Yes Bank

Yes Pay

Source: National Payments Corportion of India (NPCI) website

Transaction limits
At present, the upper limit per UPI transaction is Rs. 1 lakh.
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7 comments:

  1. Hello Rahul
    Thanks for the information in a really simplified manner.
    So it will be attached to my account and yet the other party cannot see other details? Also do you need to have internet access to operate UPI?

    ReplyDelete
  2. Yes. That is correct. However you will need internet access in order to complete the transaction.

    ReplyDelete
  3. Hi Rahul, your blog on personal finance and digital banking is really very informative and easy to understand. Appreciate your effort in this direction keep up the good work. Thanks. Adv. Ashok Nair.

    ReplyDelete
  4. Really helpful in giving the insight of the the way digital payments are made

    ReplyDelete
  5. Sir I still don't understand why is UPI and Bhim both required when either of them are good enough!

    Also digital payments are good but RBI is increasing charges on digital transfer like Paytm bank traf now has 2% surcharge + 18% GST!
    One way they want us to be digital bit they dont wanna help!
    This is hypocrisy to the core!

    ReplyDelete

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