The Unified Payments Interface (UPI) is poised to spearhead the nation’s quest to become a cashless economy. It is hailed as the biggest development in the consumer world since ATM. In other words, it is going to change the way you spend money. The primary benefit of UPI is real-time money transfer between bank accounts using smartphones. No wonder, barely a day since its launch, UPI crossed 10000 downloads in the Google Play Store.
As of now, the UPI has tied up with 19 banks – Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Catholic Syrian Bank, DCB Bank, Federal Bank, ICICI Bank, TJSB Sahakari Bank, Oriental Bank of Commerce, Karnataka Bank, UCO Bank, Union Bank of India, United Bank of India, Punjab National Bank, South Indian Bank, Vijaya Bank and YES Bank. The country’s biggest bank, State Bank of India, and Bank of Baroda are expected to join either by September or October, this year.
Here is how the UPI works, a unique id called the UPI ID is made by using your phone number which is linked to your bank account. This ID is quite similar to your email ID. For example, if your mobile number 0123456789 and your bank account is tied with ICCI Bank, then your UPI ID is 0123456789@ICICIBank. To make payments, all you have to do is open the bank app installed on your phone, choose ‘send money’ and facilitate the transaction through the UPI option. In the ‘recipient section’ type in the UPI id of the recipient, and hit ‘send’. The money gets immediately transferred to the bank account of the recipient. You can transfer up to Rs. 1 lakh through this system.
It is secure?
When you set up a UPI Id, you have to create a virtual address in the app and then add your bank account. You have to also set up an M-Pin. The virtual address and M-Pin make your transaction safe and secure.
Here are the benefits of UPI
1. Former RBI Governor Raghuram Rajan said in the soft-launch of the app in April 2016, that with the UPI, your smartphone will turn into a portable payment bank. All you need is a smartphone and a banking app to send and receive money instantly or to make a retail purchase. There is no need to carry cash.
2. When you set up an NEFT, RTGS or IMPS, you have to set up the payee account with mandatory information like bank account details, IFSC code; etc. You have to even wait for an authorization code before you go ahead and send the funds for the first time. UPI does away with all such information, all one needs is a mobile number. Additionally, you can transfer funds real time, any time of the day.
3. You do not need to carry debit cards or credit cards while shopping. You can simply transfer money real-time to the merchant’s account through UPI.
4. UPI-based transactions work on holidays too. You can also transfer money from India to any country through the UP interface.
5. The seller can also raise a payment request through the UPI. They can use the system for invoice requests.
So, the next time you are in a situation where there is not enough money in the wallet and no ATMs in sight, you can simply flip your smartphone and use the UPI to make that payment.