What is Unified Payment Interface ?
UPI (Unified payment interface) allows you to make cashless transaction using UPI app on your smartphone.UPI can be used to transfer money to friends and relatives,cash on delivery payment,over the counter payment,online shopping,payment of school fees,buying rail and movie tickets etc. (Image source:http://www.npci.org.in)
You can make minimum transaction of Rs 50 and maximum of Rs 1 Lac as per RBI guidelines.Banks may initially restrict the maximum limit for their customers.
National Payments Corporation of India’s (NPCI’s) has presently authorised 21 banks to offer their customers option to pay and receive money using UPI.
Advantages of Unified Payment Interface (UPI)
Real time transfer of funds.
Service is available 24 x 7 and 365 days.
No need to reveal your bank account and MICR code to receive or transfer funds.
How Unified Payment Interface (UPI) does it work ?
To start using UPI you need account in UPI authorised bank and a smartphone based on Android. App is not currently available for Apple iOS based smartphone users, but it will be available soon in near future.
Downloaded UPI app from play store
Create app login
Create virtual address
Add bank address
Set mobile pin
Existing mobile banking users will use have to use existing app login and mobile pin, they will have to generate only virtual address.
You can transfer money to a virtual address or initiate transaction to collect money from a particular virtual address.
Example: Rahul requires Rs 10,000 so he asks Sachin to lend him the money for one month. Sachin will transfer money from his virtual address "Sachin@SBI" to transfer money to Rahul's virtual address "Rahul@ICICI".
After one month Sachin will generate request from his virtual address "Sachin@SBI" to collect Rs 10,000 from Rahul's virtual address "Rahul@ICICI".Rahul will get an notification to accept or reject the request of payment on his mobile app.If Rahul accepts the request than the money will be transferred to Sachin's virtual address.
In similar way even your local shopkeeper or courier guy can initiate request for settlement of bill and you can pay using your UPI mobile app.
What is virtual address in Unified Payment Interface (UPI)?
Virtual address is an unique identifier used to for transaction in UPI.It like an email-id but only difference is that in place of mails you can send and receive money.Virtual address can be anything say example: xyz@ICICI,12345@SBI or sachin@axisbank.
One can create any number of virtual address and delete when not required. Virtual address will be unique as email-id, so there are no chances of funds being transferred to wrong person.You can link more than one virtual address to your bank account.You can link multiple bank accounts to single virtual address.All transfers to your virtual address will be credited / debited from your linked bank accounts.
How secure is Unified Payment Interface (UPI) ?
User bank account is not revealed anywhere in the process.One needs to only share virtual address to initiate or transfer.If your phone or sim is lost, then do not worry as to transact one will require your UPI pin or mobile pin.
What are charges on using Unified Payment Interface (UPI) ?
Currently there are no charges for transfers using UPI, but it may be chargeable in future.