The usage of internet banking has simplified the concept of financial transactions to a large extent. Still, furnishing all your account-related information every time you need to make or take payments can be jarring and time-consuming. To sort this out, the National Payment Corporation of India developed a single-interface mobile application to transfer funds between two people through their smartphones. It is known as a Unified Payment Interface or UPI payment short, and it is a real-time payment system governed under the guidelines set by the Reserve Bank of India.
It functions in the peer-to-peer format with the internal banks and enables the transfers to occur after the two-factor authentication. Only the listed banks that provide UPI options can allow their customers to avail of this facility. It is a secure way of transferring funds where the mobile acts like a platform, thus providing 24*7 service for transferring funds. Since the UPI app payment was launched in India in April 2016, it has been a game changer for the country’s financial infrastructure.
You can make and receive payments through transfers, scan barcodes, or pay utility bills recurring every month. UPI takes care of all these, and once the identification is established, no further details related to credit or debit cards are needed. This feature plays a crucial role in ensuring the safety this platform promises.
Two relevant terms known as “push” and “pull” are used in the UPI payment app system.
Push: The process of sending money is referred to as push. The user needs to select the “send money” option in the interface after entering the virtual ID of the recipient and the desired amount. To receive a transaction confirmation, the user must first select the account from which the money will be debited.
When receiving payment, the user needs to select the “collect money” option after logging in. The sender’s virtual ID, the amount to be accepted, and the account to be credited must be entered. After the payment request is initiated, it is forwarded to the remitter, which confirms the transaction by entering the PIN.
Following are the basic requirements to set up a UPI payment online on your mobile phones:
- There is a specific list of banks that are members of the UPI app system; you must have a bank account registered with any of these banks mandatorily to avail of all the services.
- There is a prescribed list of supporting applications that need to be installed in mobile phones to enable the seamless operation of UPI apps, the most common is BHIM, developed by NPCI.
- To create a virtual payment address (VPA), the bank sends an OTP to your mobile phone, which needs to be verified from your end. VPA is essential in transferring funds through the UPI app online because it must be furnished to receive payments. Two other vital fields required for funds transfer are account number and IFSC code.
Although a limit is specified for the per day transaction with UPI apps depending on the corresponding bank’s policies and guidelines, such an advanced payment application has eased the lives of many small business owners and the entire workforce of India.