What is UPI and How it Works ?

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There was a Time 9-10 years back when the Shopkeeper or the Customer does not have a Change(Chhutta) in their pocket. Sometimes we buy a product of 10-20rs and give the shopkeeper a big note of 100 or 500rs but they do not have change amount to return us(bhaiya chhutta nahi hai). Similarly if we urgently want to send someone money then we have to go to the bank standing in long queue or sometimes if we want urgent money then we have to wait for a long time for the money to get credited in our account. There was a time when transactions were made via cheque, deposit form, or ATM machine and if the transaction went unsuccessful due to any technical or mechanical fault then again we have to complain to the bank and get our problems solved which takes a lot of time, sometimes the bank employee is absent or the bank is closed due to certain reasons or the employee is not listening to our problems we get hesitated so much. 

But after the introduction of UPI(Unified Payments Interface) in India thinks have gone changed. Banks in India have started to upload their own UPI supported transaction apps on Android and IOS platforms. Some applications like Google Pay, PhonePe, Paytm are among the most famous payment applications used in India. Today in this Blog we will discuss everything about UPI, how to use it, what are the do's and dont's and at last I will share a fact about which many people are not aware.


What is UPI

Basically, UPI stands for Unified Payments Interface it is a instant real-time payment system developed by the National Payments Corporation of India. It is a system that powers multiple bank accounts on a single mobile platform, merging several banking features, seamless fund routing, and merchant payments in one hood. It can used in many ways like paying money to any merchant or a shopkeeper, transferring balance from one account to another, book online tickets from any website instantly just by scanning the QR code, or using the mobile number, bank account number, IFSC code. It is available 24*7 and can be done in just a few seconds. The pilot launch of this system took place on 11th April 2016 by Dr. Raghuram Rajan, Governor, RBI at Mumbai.

How to use it

For making UPI transactions the user need to have a mobile phone with an active SIM card linked with his/her bank account, internet and any UPI supported application. After downloading the application the user need to link his bank account with the application and generate a UPI pin(UPI pin is used for authorising payments). Now the user is ready to make UPI payments. For example if you want to send money to your friend ask his mobile number or UPI id and use your mobile application and UPI pin to transfer money instantly in just few seconds your friend will receive the money directly in his/her bank account. This process is even easier when you have QR code instead of mobile number or account number. Your UPI id will be linked to your mobile number. Watch the video given below to know more.


Points to keep in mind

There are certain points which the user need to keep in his mind. 
  • You can do a maximum transaction of Rs.1 Lakh per person or per day.
  • You need to enter your UPI pin only when you are sending money to someone, you don't need to enter your UPI pin while you are receiving money.
  • Sometime due to internet problem the payment gets failed. But the user need to worry, if any amount is debited from your account then it will come back in 3 business days.
  • The UPI transaction is all dependent on Internet so you must have a stable internet connection.
  • Do not share your UPI pin with anyone.

How to make UPI payments without Internet or any Application

The National Payments Corporation of India has developed a way by which the users can make UPI transactions even if they do not have a smartphone, internet or any UPI application. The user only needs to have mobile either a smartphone or a keypad phone and an active sim card which is linked to the user's bank account.

Step-1

Dial a USSD code *99# on your mobile phone.

Step-2

A box like this will appear on your mobile screen. If you want to send money then type 1 and click on send. Similarly if you want to request money, check balance etc. Then type 2 or 3 respectively and click on send.

Step -3

If you want to send money then type 1 and send and again a similar box will appear which will ask you by which method you will send money - Mobile number, UPI id, bank account number, IFSC code etc.

Step-4

If you send money using the mobile number then type 1 and send.

Step-5

After entering the mobile number the name of the beneficiary will appear and you will have to type the amount you want to send.

Step-6

After typing the amount you will be asked to enter your UPI pin. After entering the UPI pin the money will be credited from your account in the beneficiary's account.

NOTE- Only BHIM UPI users can make transactions via mobile number, if you are not a BHIM UPI user then you will have to enter the beneficiary's UPI id and also you cannot use the QR code to make transaction using this method.

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