UPI: All You Need to Know

Transferring money from one bank to another was a big deal before NPCI (National Payments Corporation of India) facilitated the option of inter-bank transactions using mobile applications. This RBI regulated interface, termed as UPI or Unified Payment Interface allows users to transfer funds instantly using a mobile device. Mobile payment applications such as Paytm have made it further easy to perform UPI transactions at the comfort of your home.

You would have clearly heard the term “UPI” multiple times before, but do you know exactly what is UPI?

Let’s find out!

What is UPI?

Unified Payment Interface (UPI) is a popular mobile payment method that allows you to transfer funds from one bank account to the other, instantly and free of charge. Ever since its inception, UPI has made financial transactions much easier for account holders.

Transferring money through UPI requires each user to have an ID, termed as the UPI ID. The UPI ID is a unique identification for a bank account that is used to send and receive funds from one bank to another. In UPI payment applications such as Paytm, you don’t need to enter the receiver’s UPI ID. You can simply select the receiver’s contact from your phone book or enter the receiver’s contact number to send money via UPI. The UPI PIN, on the other hand, is a 4 or 6-digit personal identification number required to transfer money through UPI. Every account holder has the option to set his/her UPI PIN as per convenience.

Why is everyone using UPI?

Nowadays, you would hear every bank account holder talk about transferring funds through UPI. If you haven’t used UPI quite often, then here are the reasons behind the hype-

  • UPI payments are very fast and typically, payment can be completed within seconds
  • Almost every bank allows UPI transactions through mobile applications
  • Payments are completely safe. To complete a payment, the user needs to have the SIM card of his mobile number present in his phone and also needs to enter the secret MPIN each time
  • UPI Payment facility allows individuals to request money from some other individual, which is not an option with other payment methods like IMPS, NEFT
  • These mobile payment applications also offer the facility of bill payments, meaning that you can set up timely reminders for all your bill payments and make the payments using the application at just one click
  • In case of any trouble or suspicious activity on your account, you can easily file a complaint using the mobile payment application
  • Payments can be made 24×7
  • It’s completely free!

The above table shows the value of UPI transactions that happened between April 2020 and April 2021. The value of these transactions increased from Rs. 151,140.66 to Rs. 4,93,663.68 in the time span of a year. These numbers have been increasing ever since UPI was brought into existence, owing to the multiple benefits offered by UPI facilities that speak for themselves.

How to get started with using UPI?

  • Download a UPI payment application, like Paytm
  • Just enter your mobile number. If you have a dual SIM phone you may be prompted to select the SIM slot in which your mobile number is present
  • An SMS will be sent from your number to verify your mobile number
  • Once this is done, you will have to select your bank name from the list that will be presented to you. Please make sure that the mobile number registered with your bank is the same as the one you entered earlier. Your bank account details will now be fetched from the bank using your mobile number
  • If you are linking your bank for the first time, you will be asked to set up a UPI PIN. You will need your Debit card details for setting this up
  • Your bank account is now linked via UPI and you are ready to make your first payment!

Ways to Transfer Money Through UPI

You can transfer money using the mobile applications through the following ways-

  • Mobile number – This allows you to transfer money from your bank account mapped with your mobile number
  • QR code – Enables you to send money using the QR code enclosed with your VPA, Account number, IFSC, or mobile number
  • VPA (Virtual Payment Address) – Allows you to send or request money from a bank account using your UPI ID
  • Account Number – This lets you send money directly to the bank account

Transfer money through UPI using Paytm today!

How to Send Money Through UPI?

Sending money through UPI is easy and safe. You may send money using any 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 to be transferred 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.

Why Should You Use UPI?

Unified Payment Interface or UPI has more benefits than you can imagine. Here’s a list of a few of them-

  • Simplified, hassle-free online payments
  • Safe and secure mode of money transfer
  • Allows you to make payments towards your bills, shop on e-commerce websites, etc.
  • Lets you make payments by scanning QR codes at your nearby departmental stores, chemist shops, etc.
  • Regularly paying through UPI also helps you earn discount vouchers, cash back, and other rewards

Is UPI safe?
Yes, UPI is absolutely safe and secure as it is based on 2-factor authentication. UPI is regulated by the Reserve Bank of India which ensures that all the transactions are performed between registered banks and no frauds take place. Additionally, each transaction through UPI is secured with MPIN which is confidential to the sender.
What is UPI full form?
UPI stands for Unified Payment Interface. It is a payment interface that allows the transfer of money from one bank to another.
What is UPI ID?
UPI ID is basically the virtual payment address of the bank account holder. It is used by the sender to transfer money to another individual through UPI. A UPI ID is unique to every individual and is allotted by the bank.
What is UPI PIN?
UPI PIN is basically the password required to authenticate a transaction. The UPI PIN must be kept confidential with the account holder.
Is UPI ID the same as UPI PIN?
No, UPI ID and UPI PIN are not the same. The UPI ID is a virtual payment address that must be shared with the payees to allow them to transfer funds to your account. The UPI PIN, on the other hand, is the password that you need to enter to confirm payment from your account.
What is UPI?
UPI stands for Unified Payment Interface. It is a payment interface used to transfer funds from one bank account to another using a mobile payment application.
How to transfer money using UPI?
To transfer money using UPI, you first need to set up your UPI account completely. Once that is done, you can go to the application, click on ‘Pay’ or ‘Send’, enter the receiver’s UPI ID or scan the QR Code, enter the amount to be transferred and click on ‘Confirm’. The money will be transferred in a matter of seconds.
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