With advancements in technology during the recent years, online transactions have become the most preferred medium of making payments, whether it is for buying/selling something or transferring money from one bank account to another. And why wouldn’t it be? Considering the benefits that online payment modes have to offer, it is evident that payment mediums like UPI are becoming popular by the day.
Well, with benefits come certain drawbacks as well. While there are innumerable benefits offered by UPI as a payment mode, there are also certain limitations that you must consider. Let’s discuss more about whether it is safe to use UPI payment apps for money transactions in the blog ahead.
How UPI Payment Apps Work?
Before we move on to discussing the safety of UPI payment apps for money transactions, let’s first understand how UPI payment apps came into existence and how they work.
While the traditional payment modes require users to provide the receiver’s details such as the account number, IFSC, account type, Bank name, etc. This will add the receiver as a new payee to the sender’s account within 12 hours and the transfer could only be processed after this process is completed.
UPI payment came into existence only to allow individuals to get away from this time-consuming and complex process. With this facility, individuals can easily transfer money to one another, using only the specific UPI ID to the account holders. Before you begin to make payments through UPI, you need to register yourself on the application. Once you have successfully registered yourself on the application, you need to follow some simple steps to make UPI payment /transfers.
You can make money transfer through UPI using either of the following ways-
- Selecting a Contact/Entering Mobile number – Sending money is as simple as sending a message. Just select a phonebook contact or enter a mobile number, specify the amount and enter your PIN. That’s it. Your payment will be completed in a few seconds.
- Scanning a UPI QR code – You can also send money through UPI by scanning the receiver’s QR code. All you need to do is open the mobile payment application like Paytm on your phone, click on ‘Pay’, and select ‘QR code’. Scan the QR code of the receiver and enter the amount to be paid. Now enter your PIN and your payment will be completed in a few seconds.
- Entering UPI ID – To send money through UPI ID, all you need to do so is open the mobile payment application, and enter the receiver’s UPI ID. After this, you need to enter the amount that needs to be transferred and verify the transaction by entering your MPIN. Your transaction will be completed in a few seconds.
- Entering Account Number & IFSC – This the traditional way of payments and it is also supported on UPI. You may enter the account number & IFSC of the person you want to send money to, specify the amount and enter your PIN. Your payment will be completed in a few seconds.
Is it Safe to Use UPI Payment Apps for Money Transaction?
As the above process for UPI payment explains, users can only use the online medium like a UPI payment application such as Paytm to transfer money through UPI. On top of this factor, the following points prove the safety of UPI payment apps for money transactions-
- At every step in the UPI payment process, users will have to prove their authenticity by entering their unique UPI ID/receiver’s contact number and UPI PIN. The UPI ID is a unique identifier for a user’s identity and the UPI PIN is set up by the user himself and must be kept confidential at all costs
- To process every transaction through UPI, users must enter the UPI PIN, which is a 4 or 6-digit set up by the user himself for the purpose of confidentiality. Users are also advised not to share their UPI PIN with anybody to ensure the safety of transactions
- As and when a user registers himself for UPI, his/her mobile number is verified using an OTP sent on the registered mobile number. The app automatically links your UPI account to your mobile number. Even if the user’s mobile phone gets stolen/lost, he/she can easily block the number as a safety net against identity theft
- UPI payment applications like Paytm offer additional security features such as it does not allow its users to take screenshots of the app or the transaction journey in order to ensure safety of the credentials entered by the users
- Paytm, also notifies its users to never share their OTPs with anyone. Moreover, Paytm representatives never call their users for any additional/personal information
- Another additional UPI security feature is UPI collect, wherein the merchant payment app sends a request to the sender’s VPA and the sender approves the request from his/her UPI app in order to complete the transaction. However, it is important that the sender approves only those requests that he has initiated. There are also chances of fraudsters sending random requests to random VPAs and users might fall into it
While the UPI payment apps are quite safe and easy to use, there is a lot that the user must take care of. Listed below are some of the basic UPI related frauds and how users must stay away from them-
- Request money frauds – Fraudsters target users on platforms like OLX, Quikr, Flipkart, etc. and reach out to them stating that they are interested in buying their products or that they are representatives of e-commerce websites and ask you to request the amount of money that you need to receive. Do not fall into traps of requesting money or paying a minimal amount in order to receive a huge sum. You do not need to send money or share any additional details other than your contact number with anybody in order to receive money. Always, make sure that you request money only from those who you know very well.
- OTP/UPI PIN-related scams – You should never share your OTP/UPI PIN with anyone. When you make a transaction through any UPI application, you need to authenticate your transaction through a UPI PIN to prove your identity. Hence, you should never ever share such information with anybody as it is a proof of your identity to the bank/payment application.
- Phishing scams – To stay away from falling prey to such phishing scams, it is strictly advised that you don’t click on any link to receive or make payment unless you have initiated any such transaction through your UPI app. To help users from falling prey to such scams, various mobile payment applications such as Paytm also send continuous reminders to their users stating that the application would never ask a user to click on any link to make/receive payment unless initiated by the user himself/herself.
- Remote screen mirroring – Although Google Play Store and Apple App Store contribute to their maximum in removing duplicate and false apps from their platforms, you may still come across an application or two that’s unverified. Therefore, it is recommended that you download only trusted, verified applications on your mobile phone. Also, before downloading any app, you must verify the name, developer, registered website and email address of the application properly.
- Deceptive UPI handles – It is strictly prohibited that you do not post your account details or any related contact information on any social media platform. Even though you might post it for a brand to recognise, it is less likely that your motive would complete. Instead of the brand, it is more likely for a fraudster to come across your contact details, using which they may contact you and misuse your information. Remember, every social media page/UPI handle that has a government related term is not authentic.
Along with multiple benefits that UPI payment apps offer, there are certain check points for UPI users. However, these points can be in the control of the users, all that a user needs to do is stay alert with the transactions happening on his/her UPI account. To put it into simple words, it can be said that staying away from strangers will keep you safe in all respects. Just do not respond to SMSs with unverified links, calls from any bank representatives or the like (unless you have initiated any such call), individuals asking for your CVV, OTP or UPI PIN, etc., any social media handle asking for your contact details or any unverified application.
Simply staying away from any transaction, call, etc. that you haven’t initiated will be good enough for you to stay secured against your UPI account. It is also advised that you learn how UPI actually works so that you are completely aware of the process. This will provide you with complete information of the UPI process and will help you stay away from any misguidance.
- SMSs with unverified links
- Calls from any bank representatives or the like (unless you have initiated any such call)
- Individuals asking for your CVV, OTP or UPI PIN, etc.
- Any social media handle asking for your contact details
- Any unverified application