The National Payments Corporation of India (NPCI) is the main organization for all retail payments systems in India. It has been set up with the guidance and support of the RBI and Indian Banks Association (IBA) .
About Unified Payments Interface
UPI is an online payments solution to facilitate the transfer of funds instantly between person and person using a smartphone. UPI can used to both send and receive funds. The system was launched this year in April by the then RBI Governor Raghuram Rajan.
It allows customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC code or net banking⟋wallet passwords.
It is safe as the customers only share virtual address and provide no other sensitive information.
Transactions performed via UPI are Merchant payments, remittances, bill payments among others.
Per transaction limit is ₹ 1 lakh.
NPCI claims it is as simple as sending a text message.
With UPI, the transactions⟋purchases made linked to a unique number that acts as your virtual address number for all payments. It is a mobile interface and work on mobile phones only.
How Exactly to Get Started with UPI?
Download the app from Play Store and install in phone
Set app login
Create virtual address
Add your bank account
Set M-Pin
Start transacting using UPI
How is UPI Different from Other Modes of Electronic Payment
The transaction carried out in a highly secured environment that nullifies any kind of risks.
Transaction costs is low as compared to other international players NPCI will earn 50 paise per transaction.
Multiple bank accounts can linked to a single cell phone. Hence, an account holder of one bank can send ⟋ receive money to someone having account in same ⟋ different bank through smart phones hence time saving in nature.
It will work on real time basis and would be available 24⚹7 unlike NEFT. NEFT transactions do not happen on holidays and during non-banking hours, there are limitations in funds transfer.
Bank can create their own interface since it provides open architecture hence flexible in nature.
Broader Objective of Launching UPI
Aims to promote people migrate towards cashless economy in the medium and long term.
It is also possible that tax rates, including GST, could be lower if tax evasion was lower.
This would help bankers analyze and provide firm up approvals for credit to customers.
With the growing use of smartphones in India and the number of mobile phone subscribers a billion, large number of transactions are expected to be carried out through phones or electronically.
Bring more transactions through the electronic mode rather than by cheques.