UPI - Unified Payments Interface

About UPI

Unified Payments Interface (UPI) is a payment system that allows users to link more than one bank account in a single smartphone app and make fund transfers without having to provide IFSC code or account number. This is a real-time payment system where funds are credited instantly on a real-time basis. Apart from sending money, users will also be able to make ‘collect’ requests. A user will only have to use a virtual address, known as a Virtual Payment Address (VPA) to carry out any transaction. UPI has been developed by the National Payments Corporation of India (NPCI) and is regulated by the Reserve Bank of India (RBI).

UPI - Unified Payments Interface

UPI is slowly becoming the most preferred form of digital payment. The UPI interface is compatible with most banks and many digital wallets, and payment applications are embracing UPI. Some of the apps include Google Tez, Airtel Payments Bank, Paytm, PhonePe and the like. There are many apps, third-party applications and banking apps in the market that are UPI-enabled and new payments applications and social media platforms are also trying to integrate with the UPI platform. UPI makes the fund transfer process easier, faster and hassle-free. There is no need to go through the cumbersome process of entering all bank details. Users can both send and receive money using a VPA.

National Payments Corporation of India

National Payments Corporation of India or NPCI is a unified organization for all systems for retail payments across India. This organization was created under the supervision of the Indian central bank being Reserve Bank of India (RBI) as well as Indian Banks’ Association (IBA). In 2005, the RBI set up the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) in 2005. Once that was done a organization was proposed in a vision document incorporating Retail Payment Systems across the country. The main aim was to accumulate multiple payment systems across the country that have different service levels in complete uniformity along with good standard business process being practiced for retail payment systems. But UPI was a simple effort formulated with the vision which was secondary in the creation of NPCI which was to provide the public with affordable payment platform to aid financial inclusion as well as make payment convenient for an ordinary man.

Features of UPI

The UPI interface allows users to avail a number of services. The following are the transactions that can be carried out using UPI:

  • Sending and receiving funds
  • Making requests for funds
  • Pay merchants through QR code scanning via BHIM
  • Pay for cabs

UPI Transaction Limit

UPI has a certain per day and per transaction limit on the value of transactions. Given below are the updated transaction limits that is followed by some of the top banks in the country:

Particulars Per transaction limit Transaction limit per day
UPI Rs.1 lakh Rs.1 lakh
  • In most cases, the maximum number of UPI transactions that can be made per day is around 20
  • While some banks like ICICI, HDFC, SBI and PNB allow you to send Rs.1 lakh per transaction, other banks may allow you to send only Rs.10,000 per transaction
  • The maximum limit for BHIM UPI is Rs.10,000 per transaction and Rs.20,000 in a 24 hour window
  • The transaction limit may be revised from time to time

UPI is a fast and easy to use interface and comes with a number of benefits including direct payment to any party without having the need to provide cumbersome details like account number and IFSC Code. Fund transfers can be initiated on a 24/7 basis and UPI has tied up with more than 40 banks in the country.

Check IFSC Code for Top Banks:

What are the transactions that can be performed using UPI?

The following are the type of the transactions, that can be conducted through UPI:

  1. Remittances: If you need to send or transfer money quickly to your friends or family, or somebody needs money urgently, this app this correct click or tap for the individual.
  2. Bill payments: From Utility bills to your communication bill payments can be made.
  3. Merchant transactions:This could be anything from booking movie tickets online to buying groceries on an online app.

Know other ways of money transfer - NEFT , RTGS , IMPS

How Do I register on the UPI App?

Here are the steps you need to follow for registering on your bank’s UPI app:

  1. You need to first download the UPI application from the Google Play App Store or the Bank’s website. Most banks will send you the download link your phone if you try to download it from the bank’s website. The UPI app for ICICI Bank is called iMobile. Similarly, all the other banks wills have similar apps. But hereon the registration process followed by all the banks are more or less the same for most banks.
  2. Once you have finished downloaded the app. Open the app and create a profile.You need to entering details for the registration such as your name, a virtual id or payment address, an appropriate password, account details.
  3. There would be an option such as, Add or Link or Manage Bank Account which will then allow you to link your bank account number with the newly created virtual id.
  4. You would also need to use a M-PIN to use UPI. In order to do that you have generate it through the following steps:
    • Choose the bank account from which you want to pay using UPI and Mobile Banking Registration/Generate MPIN.
    • If you tap on Generate MPIN, you will receive a One Time Password (OTP) from you bank on your registered mobile number.
    • It will then ask you for the last 6 digits of debit card number and the expiry date of your card.
    • Simply enter the 6 digits of OTP and the MPIN of your choice, followed by a tap or click on submission button.
    • You will then get a confirmation text for your new MPIN.

How to Make Payments Using UPI?

This is how UPI works when sending money to another party:

  1. You need to first Log on to your bank’s UPI application
  2. Once logged in choose the option for sending money or payment.
  3. You need to then enter the beneficiary’s virtual id and the amount you wish to send followed by the account number.
  4. Once you get a confirmation message, do check the payment details to confirm the payment.
  5. You need to then key-in the MPIN.
  6. You will get a notification that will know whether the payment ‘successful’ or ‘failure’ message.

How to Receive Payment Using UPI?

This will also help you to understand how to accept or decline if someone sends you a UPI payment request from their end. For this too, you need to log on to your bank’s UPI application:

  1. Once you are logged in successfully tap the collect money option that signifies request for payment.
  2. You need to then enter the payer or money sender’s virtual id, the amount as well as the account that needs to be credited.
  3. On the next screen that will follow you will need review and check the payment details and then tap or click to confirm.
  4. The request money notification will be then sent to the payer.
  5. Now the payer has to tap and click on the sent notification.
  6. He or she opens his or her bank’s UPI app reviewing your payment request.
  7. Payer then can tap on accept or decline based on their decision to pay your account.
  8. He or she would have to enter the MPIN for authorising the transaction.
  9. Once you get the transaction is complete, payer gets notified if the transaction was ‘successful’ or was ‘declined’.
  10. As a recipient also get a notification as well as text from bank once the money has been credited to your account.

Banks Which Offer The UPI Facility:

The following banks are some of the banks which offer payments through UPI from their banks accounts as of August, 2016. However, there are more to banks who are opting in for it.

  1. Andhra Bank
  2. Axis Bank
  3. Bank of Maharashtra
  4. Bhartiya Mahila Bank
  5. Canara Bank
  6. Catholic Syrian Bank

  1. DCB Bank
  2. Federal Bank
  3. ICICI Bank
  4. TJSB Sahakari Bank
  5. Oriental Bank of Commerce
  6. Karnataka Bank
  7. UCO Bank

  1. Union Bank of India
  2. United Bank of India
  3. Punjab National Bank
  4. South Indian Bank
  5. Vijaya Bank
  6. YES Bank

FAQ's on UPI (Unified Payments Interface)

  1. What is UPI?

    Ans: UPI, expanded as Unified Payments Interface, is a real-time fund transfer process built by the NPCI. The system works based on the IMPS interface.

  2. Which UPI app should I download?

    Ans: There are many UPI apps and a user is free to choose any app from Google Play store.

  3. Is it necessary to download the UPI app of your bank?

    Ans: No. Users can download any UPI app. Also, it can be your bank app or another bank’s.

  4. What is a UPI PIN?

    Ans: This is a pin that is set during the registration process. It is used to authorise all UPI transactions.

  5. What should a user do if the UPI transaction fails but the money is debited from the customer’s bank account?

    Ans: In such cases, the money will be credited back to the user’s account within 1 hour. If the money has not been refunded even after this time period, feel free to contact the customer care.

  6. Money has been debited from my account even though the transaction is still pending? What should I do?

    Ans: In most instances, the transaction would have been processed. The pending status will be displayed if there are server issues at the payee/beneficiary backend. The issue will be resolved within 48 hours, if not contact the customer care.

  7. Is it possible to have more than 1 UPI app on the same smartphone and link them to separate bank accounts?

    Ans: Yes. You can link more than one UPI same to the same bank account number or a different bank account number.

  8. What are the mobile platforms that UPI can be used on?

    Ans: UPI can be used on Android and iOS platforms.

  9. What is the maximum amount you can transfer using UPI?

    Ans: The maximum amount of money that can be sent is Rs.1 lakh per transaction.

  10. In case I want to register a complaint, how do I do that?

    Ans: A complaint can be made on the UPI app itself.

  11. I entered a wrong UPI PIN, what will be the consequences?

    Ans: If a user enters a wrong UPI PIN, the transaction will fail.

  12. What should I do if my bank name is not detected in the UPI app?

    Ans: The first step is to ensure that the mobile number being used is linked to the same bank account. If not, the app will not be able to recognise the bank and the linking process will not be complete.

  13. Is it possible to pay merchants through UPI?

    Ans: Yes. Payments can be made online on e-commerce sites if the UPI option is available.

  14. How to pay using UPI online?

    Ans: Go to the merchant site, choose the UPI option, enter VPA and your UPI PIN.

  15. Can money transfer be made on bank holidays?

    Ans: Yes.

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News Related to Unified Payments Interface (UPI)

  • Use UPI to withdraw cash at shops

    All the shops that have now partnered with banks will be able to provide cash withdrawal facilities to customers via UPI (Unified Payments Interface). This move will in turn reduce the need for people to line up at ATMs and bank branches. The limit for withdrawal is Rs.2,000 per day per card in all Tier III-VI areas. In in Tier I areas, the limit is Rs.1,000. All charges cannot be more than 1% of the transaction amount.

    The RBI had allowed cash withdrawal at Point of Sale (PoS) terminals by the use of debit cards and also open system prepaid cards. The RBI had said that cash can be withdrawn at PoS terminals via Unified Payments Interface (UPI) with the use of electronic cards which are linked with overdraft facility with Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts. The banking regulator had said that credit cards are not allowed for cash withdrawal at PoS terminals.

    8 May 2020

  • UPI 2.0 Features Fail to Meet Expectations of Industry Experts

    As per a report, the launch of the upgraded version of Unified Payments System (UPI), dubbed as UPI 2.0 might get delayed as some of the new features have not been developed well enough. The National Payments Corporation of India (NPCI) which demonstrated the new features to industry experts were expecting to launch the updated version in the month of July. The updated version comes with a variety of anticipated features like peer-to-peer payments, sending an invoice to the customer after making a purchase, making secure QR code payments, and promote merchant transactions. The daily transaction limit on UPI 2.0 is also doubled up to Rs 2,00,000.

    A person familiar with the demonstration has informed that the feature which enables automatic payments for bills and loans at specific intervals would not be part of the new update and would be rolled out later. Apart from that, the amount blocking functionality which allows users to block a certain amount of money in the bank account for future bookings is expected to come with some trade-offs. It needs to be mentioned that the umbrella organization for all retail payment systems in the country is expected to launch a beta version of UPI 2.0 at first. The beta version would carry support from only eight to ten banks that operate in the country. Based on the response received, the organization would update the features and roll out the service.

    24 July 2018

  • UPI Transactions See a Surge in April

    The number of Unified Payment Interface (UPI) transactions has been on a surge on the recent months both in terms of value and the total transaction numbers. When compared to the month of March, the total transaction value in April has seen a rise by 7% overall. This data has been obtained from the National Payments Corporation of India (NPCI).

    As far as the total number of transactions are concerned, the number was 27 times more for the month of April, when compared to the same month in the previous year 2017. On the whole, the increase in number was by around 12%, standing at a whopping Rs.27,021.0 crore for the month of March in 2018. The total amount transacted for the month of April in 2018 was 12 times more when compared to the same month in the previous year. UPI is a type of payment method using which there is no need to add a beneficiary or provide details such as account number or IFSC code. All payments can be made using a single ID, which is usually referred to as Virtual Payment Address (VPA). Transfers can be made at any time and from anywhere and there is no need for a remitter to know the IFSC code of the payee in question.

    21 May 2018

  • UPI Transactions Up by Over 1000 Percent During 2017-18 Financial Year

    The central government’s initiative of having a seamless digital payments platform for transactions received a big boost as Unified Payment Interface (UPI) witnessed a huge growth in the last financial year. As of March this year, the total transaction value of payments made through UPI was Rs.24,173 crore as compared to Rs.2,271 crore in April 2017 which shows that the increase witnessed was 1,064%.

    Meanwhile, the figures for the month of March with regard to the total number of transactions was 17.8 crore. It saw an increase of 3.73% as compared to the previous month. The value of transactions rose by 26.38% during the same time period. It needs to be mentioned that the growth witnessed in UPI based transactions to apps like BHIM, Tez, Paytm, PhonePe as well as to e-banking apps. Given the surge witnessed, the government is hopeful that UPI adoption will reach the target of 10 crore users by the year 2020 with the help of the existing platforms and new entrants like Whatsapp.

    7 May 2018

  • Hope for 100 Million UPI User Mark: NCPI

    The National Payments Corporation of India wants to increase the UPI user mark to 100 million in the next two years. The focus was on increasing the peer-to-peer payment ecosystem in the UPI system but from henceforth the aim of the platform will be to expand the person-to-merchant space in India in the coming days.

    7 May 2018

  • People Go Digital as ATMs Dry Up in Dehradun

    People in and around Dehradun are going digital as ATMs there have been dry for a brief period. With this scenario in place, shopkeepers who have online payment modes are gaining a number of benefits.

    Those in need of cash for daily purchases are taking the digital route. According to shopkeepers, many people have been asking if there are digital payment modes and if they accept payments through Paytm and the like.

    People are also taking up the Unified Interface Payments (UPI) system to make payments. Many people in the city have been adopting to this mode. People are happy that payments can be made in a simple, hassle-free and easy manner without the need to furnish bank account details or IFSC code.

    A resident of the city said that UPI has made things much easier and that money can be both sent and received without the need for a specialised app or cumbersome money transfer process using all payee details. With UPI, there is no need to register a beneficiary and payments can be made using what is known as a Virtual Payment Address (VPA) at all times.

    23 April 2018

  • UPI Usage Surges as Debit, Credit Payments Decline

    It has come to light that the number of debit and credit card transactions have come down when compared to the number UPI transactions in the country, according to a recent report.

    While there has been an unprecedented growth rate as far as UPI is concerned since its inception in 2016, card-based payments have grown only by 20%. It has been predicted that this growth rate is because of the various benefits offered by UPI such as cashbacks and discounts.

    The drawback as far as cards are concerned is the lack of cashback and other schemes, and they also come with a certain transaction fee, which is a downside.

    The digital payment environment has grown immensely in the country and there are also several apps in the market that support this payment method. It seems like card-based payments are slowly losing their charm. There have been quite a few developments as far as physical cards are concerned too in order to keep up with the competition. An example of this is the coming up of contactless cards in the digital payment ecosystem.

    Many global brands are also taking up to UPI and examples of this include Google Tez, Amazon, Uber, and even WhatsApp.

    3 April 2018

  • UPI-Based Payments are Giving a Tough Competition to Visa and Mastercard

    Unified Payments Interface (UPI) based transactions has seen a surge since 2016. As a result, global debit and credit card companies like Mastercard Inc. and Visa Inc. are losing their market share in India. The latest data from the Reserve Bank of India (RBI) has revealed that in February 2018, UPI-based transactions reached almost 50% of the value of debit and credit cards swiped at stores.

    According to a December 2017 report from the Fidelity National Information Services, adoption rates of UPI payments has been remarkable since the introduction of UPI in August 2016. This has led to the creation of a wealth of new innovative payment solutions in the country. The US-based firm further stated that UPI- based transactions has increased 100 times to 9.2 million from just 92,000 in the first nine months of operation. Meanwhile, payments via debit and credit cards saw a decline from 271.1 million in January to 247.1 million in February.

    The UPI-based payments has been adopted by several major players like WhatsApp, Amazon, BigBazaar and others. According to the report, the digital payments market in India will show a five-fold increase and hit $1 trillion by 2023. Currently, the market is worth around $200 billion

    28 March 2018

  • 171.4 Million UPI Transactions in Feb

    THe number of UPI transactions have surged in the month of February to 171.4 million, while the total number of transactions made through the interface was 19, 126. On the other hand, BHIM transactions for the same month stood at a value of Rs.4,011 crore, while the total number of transactions went up to 9.9 million.

    26 March 2018

  • IRCTC Website & App Gets UPI Courtesy Razorpay

    Indian Railways Catering and Tourism Corporation (IRCTC) has teamed up with online payment solutions company Razorpay for Unified Payment Interface (UPI). As a result of the collaboration, customers will now be able to book train and flight tickets via UPI. One can already book tickets using other payment modes like credit/debit card, net banking and mobile wallets. IRCTC’s website and app is expected to process over a million transactions a month with the UPI integration. Over 65,000 large and small businesses use Razorpay as an online payment gateway. The user base is expected to hit 2 lakh by the end of 2018. Launched in 2014, Razorpay rebranded itself as a payments solution company last year in September by rolling out a number of new payment products. Launched by National Payments Corporation of India (NPCI) in 2016, UPI is a payment system that facilitates fund transfer between two bank accounts instantly via mobile. The government has been taking efforts to push digital payments in India and move towards a cashless economy.

    14 March 2018

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