What is UPI Payment and How it Works?

UPI is a popular mobile payment method that allows you to transfer funds from one bank account to the other. Ever since its facilitation, UPI and its facilitated payment application, Paytm has made financial transactions much easier for account holders. There are innumerable benefits that explain why you should make UPI payments-

  • 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.
  • Payments can be made 24×7
  • It’s completely free!

What is UPI Payment?

UPI Payment is the advanced version of the old-school payment methods of IMPS and NEFT. Through UPI Payment, the account holders can transfer a certain amount from one bank account to another without additional charges. To transact through the Paytm UPI payment application, every individual needs to set up a UPI account and a UPI PIN that is the password for confirming the transaction. To transact through Paytm, 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 payment method has turned out to be useful for many because of the following reasons-

  • To transfer money through UPI, the user does not need to enter any specific details of the receiver. In Paytm UPI payment application, you can simply select the receiver’s contact from your phone book or enter the receiver’s contact number to send money via UPI
  • Unlike other payment methods, UPI money transfers do not require much hassle and can be completed within a few seconds
  • UPI Payment facility allows individuals to request money from some other individual, which is not an option with any other payment method
  • Almost every bank allows UPI transactions through mobile applications
  • UPI transactions on Paytm is absolutely free of cost

How does UPI Payment Work?

The traditional way of transferring funds online requires the sender to provide the receiver’s details such as the account number, IFSC, account type, Bank name, etc. Entering these details will add the receiver as a new payee to your account within 12 hours. You can make the transfer only 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/contact number of the receiver. Before you begin to make payments through UPI, you need to register yourself on Paytm UPI payment application, which can be done in a few simple steps as explained below-

  • Download the Paytm UPI payment application
  • 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. You can check this/set this up from the ‘Payment Settings’ option under ‘Profile’ section in your Paytm app
  • Your bank account is now linked via UPI and you are ready to make your first payment!

Once you have successfully registered yourself on the application, you need to follow some simple steps to make UPI payment /transfers.

Firstly, it is important to note that 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 Paytm mobile payment application 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.
Recommended Read – Here’s Everything You Need to Know About UPI AutoPay

FAQs

Is there a maximum limit on UPI payment?
Yes, the maximum limit on UPI transactions on the Paytm app is Rs. 1 lakh per account, every 24 hours. Some banks may, however, restrict the transaction at a lower amount too. Additionally, the UPI transaction limit for merchants has been increased to Rs. 2 lakh in a single UPI transaction.

What is UPI payment?
UPI payment is a mobile payment interface that allows you to transfer money from one bank account to another using your mobile phone. Unlike IMPS/NEFT, UPI is quick and easy to use.

Is UPI safe?
UPI payments are absolutely safe. UPI payments are regulated by the Reserve Bank of India & NPCI and Paytm mobile payment applications follow all the guidelines as laid down by these regulators. Payments can only be initiated from a mobile phone in which your SIM card or the mobile number registered in your Bank is present. Also, you need to confirm your secret UPI PIN before every UPI payment.

How does UPI payment work?
To make a UPI payment, you need to create your profile on the Paytm UPI payment application that provides UPI service, and create your UPI account. Once that is done, you can make UPI payment either by entering the receiver’s contact number or by using the QR code feature.

What is UPI ID?
UPI ID is a unique virtual payment address, allotted to every user by the UPI app. You can share this UPI ID with the person from whom you want to receive money instead of sharing your Account Number and IFSC code. In Paytm UPI payment application, 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.

Will I be charged for UPI payments?
There are no charges for using UPI. You can send money instantly and free of cost.

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