Your 10 Most Common Questions About UPI – Answered Here!

In a bid to make India cashless, Government of India is taking several initiatives as part of the Digital India Programme. Based on the immediate payment service (IMPS), it enables citizens to make inter-back transactions in real time – a direct bank to bank transaction with no intermediary involved. Not only is UPI easy to use, it is also very safe. Do you know? In March 2018 alone, transactions worth Rs. 24,172 crore were made through UPI! As more and more banks start offering the service along with attractive referral offers and incentives for customers, the adoption is only going to increase further. Want to know more about UPI?

Here are answers to your 10 most common questions:

1. What is UPI?

UPI or Unified Payments Interface is a real-time payment system developed by National Payments Corporation of India that makes inter-bank transactions seamless and quick. Since over 100 leading banks provide this service in 12 different languages, you can be assured of instant money transfer between the banks of your choice, using the provider of your choice, in the language of your choice.

2. How is UPI different from and better than a mobile wallet?

Unlike traditional mobile wallet which takes a specified amount of money from a user and stores it in a digital account, UPI withdraws and deposits funds directly from the bank account. Also, mobile wallets compel users to transfer money from a bank account into the wallet, and then to the beneficiary. However, with UPI, you only need to use a unique ID (called as Virtual Payment Address and this is provided by your bank), your account number, IFSC code, a mobile number, and your Aadhaar Number to send and receive money from your smartphone. What’s even more convenient is not having to fill in any sensitive information such as bank account details or internet banking ID and password as compared to mobile wallets where KYC is mandatory.

3. How do I make a UPI transaction?

Making UPI transactions is easy. All you need to do is download the UPI app or use third party apps like Google Tez, BHIM Paytm, Whatsapp or PhonePe, register yourself on the app with your account details, create a virtual ID and set a UPI PIN. Once your account is created, you can seamlessly transfer money between bank accounts. BHIM UPI for instance, creates and uses a virtual address instead of an actual payment instrument address in order to safeguard the confidentiality of account numbers and card details. Every UPI transaction requires a 2-factor authentication (user’s device information + mobile number); and device verification is done through a push SMS instead of the conventional OTP.

4. How safe is it?

Security lies at the crux of UPI payments. Since UPI links itself with your registered mobile number for identification, the minute you sign up for the UPI app, you get a push message for registration. This way, no one other than you can enter the details from another device. Further, for any transactions you make, UPI adds an extra layer of security by asking you to create a PIN using your card details and verifying it using the OTP sent by your bank to your mobile number. Apart from this, all the UPI transactions are single click with two-factor authentication – they require UPI PIN.

Do I need a separate device to use it?

No. UPI transactions can be made by anyone with a bank account. All you need is a bank account, a mobile number linked to that account, a smartphone with Internet facility and a debit card (if you want to reset your mobile PIN) to make payments with a single click.

6. How long does it take for money to get credited?

Successful UPI transactions happen instantaneously; the moment you initiate a transfer, the amount gets credited into the beneficiary account.

7. Can I make a UPI transaction on a bank holiday?

Certainly! UPI is built over Immediate Payment Service (IMPS) for transferring funds. Being a digital payment system, it is available 24 hours a day, 7 days a week and all through the year – including bank and public holidays.

8. Are there any transaction charges?

The transaction charges levied in UPI are totally dependent on individual banks. However, most banks levy no charge as they are of the opinion that imposing charges will hamper UPI adoption.

9. What is the fund transfer limit?

With UPI, you can transfer funds up to 1 lakh rupees, although this may vary from bank to bank.

10. What transactions can users carry out using UPI?

With UPI, you can do a host of things: check your balance, view your transaction history, send or collect money, add a bank account, change or set your mobile PIN, approve collect request from merchants, get notifications and manage your account.