In today’s fast-paced world, digital payments have revolutionised how we handle money. The days of carrying cash or waiting in long bank queues to complete transactions are a thing of the past. Unified Payments Interface (UPI) has made digital transactions easier, faster, and more accessible to everyone. But what exactly is UPI, and how does it work? Let’s understand its mechanics, and explore how you can make the most out of this revolutionary technology.
What Is UPI?
UPI, or Unified Payments Interface, is a real-time payment system developed by the National Payments Corporation of India (NCPI). It enables users to link multiple bank accounts within a single mobile application, simplifying fund transfers between bank accounts. UPI allows users to make instant payments using their mobile devices without needing to share sensitive information like bank account numbers or IFSC codes.
What Is UPI ID?
A UPI ID, also known as a Virtual Payment Address (VPA), is a unique identifier assigned to a user, which is used to send and receive money via UPI. It usually looks something like “yourname@bankname” and can be customised based on your preferences. Unlike traditional bank transfers, where account numbers and other details are required, UPI IDs make transactions simple and secure.
How Does UPI Work?
UPI works on a simple yet highly secure mechanism. It serves as a link between the recipient’s or merchant’s account and your bank account. When you initiate a transaction, the UPI system verifies your account and transfers funds in real-time. Here’s a simplified breakdown of the UPI process:
- Link your bank account: First, you need to link your bank account to a UPI-enabled app like Google Pay, PhonePe, or Paytm.
- Create a UPI ID: Set up a unique UPI ID linked to your bank account.
- Generate a UPI PIN: Create a UPI PIN that will be used to authorise transactions.
- Initiate a transaction: Enter the recipient’s UPI ID, and phone number, or scan a QR code.
- Authorise with UPI PIN: Confirm the transaction by entering your UPI PIN.
- Instant transfer: The funds are transferred instantly without additional charges.
How to Create UPI ID?
Creating a UPI ID is straightforward and can be done via various UPI-enabled mobile applications. Here’s how you can create a UPI ID on some popular apps:
1. How to Create a UPI ID on the BHIM App?
- Download and open the BHIM app.
- Choose your language and proceed.
- Send an SMS to confirm your mobile number.
- Select your bank and confirm your account details.
- Set a 4 or 6-digit PIN for secure transactions.
2. How to Create a UPI ID on Google Pay?
- Download and open the Google Pay app.
- Tap on your profile picture.
- Go to “Bank account” and select your bank.
- Click “Edit” next to ‘UPI ID’ and create your UPI ID.
3. How to Create UPI ID on PhonePe?
- Download and open the PhonePe app.
- Click “Bank Accounts” under “My Money.”
- Choose your bank account and enter your UPI ID.
- Click on “Activate” to finalise your UPI ID.
4. Create UPI ID through *99#
- Dial *99# on your phone.
- Enter your bank name or IFSC code.
- Provide your debit card details.
- Confirm your UPI PIN to set up your ID.
How to Set UPI PIN?
Your UPI PIN is crucial for authorising UPI transactions. Here’s how to set it up:
- Open your UPI app and select “Add Bank Account.”
- Choose your bank and verify your mobile number.
- Set a 4-6 digit UPI PIN.
- Complete the setup to start using UPI services.
How to Transfer Money Using UPI ID?
- Open your preferred UPI app.
- Enter the recipient’s UPI ID, and phone number, or scan their QR code.
- Enter the amount and your UPI PIN to authorise the transaction.
Features and Benefits of UPI ID
- Reliability: The National Payments Corporation of India (NPCI), which oversees UPI, ensures that the platform operates with robust security measures and infrastructure, minimising technical glitches and delays.
- Real-time transfers: Whether it’s paying a friend, settling a bill, or making a purchase, the real-time nature of UPI ensures that transactions are completed within seconds, enhancing the user experience.
- Inclusivity: UPI fosters financial inclusion by allowing integration between different banks, UPI enables even those from smaller, regional banks to participate in digital transactions.
- No minimum transaction limit: UPI allows users to transfer any amount, whether it’s a few rupees or several thousand. This flexibility makes UPI accessible to all, catering to everyday needs such as splitting bills or making micro-payments.
- Enhanced security: UPI prioritises user security with two-factor authentication (2FA), which includes a UPI PIN that must be entered for every transaction. This added layer of protection helps prevent unauthorised access.
- 24/7 availability: UPI transactions can be conducted at any time, even outside standard banking hours. This 24/7 availability allows users to make payments whenever needed.
- All banks covered: UPI’s support extends to all major banks in India, making it a versatile and unified platform for digital payments. Users are not restricted by their bank’s digital payment options.
- Versatile Usage: Beyond simple money transfers, UPI offers a wide range of uses, including bill payments, online shopping, and QR code-based payments at physical stores.
How to Change UPI ID?
Changing your UPI ID is simple and can be done through most UPI apps. Here’s how you can do it on different platforms:
Change UPI ID on the BHIM App
- Open BHIM and go to your profile.
- Tap on “Settings” and locate the UPI ID option.
- Edit your UPI ID and confirm changes.
Change UPI ID on Google Pay
- Open Google Pay and go to “Payment Methods.”
- Select the bank account linked to the UPI ID you wish to change.
- Edit the UPI ID by clicking on the “+” sign.
Change UPI ID on PhonePe
- Open PhonePe and go to your profile.
- Select “My UPI ID” and make changes.
- Click on “Activate” to confirm your new UPI ID.
How to Remove an Extra UPI ID
If you have multiple UPI IDs, you can easily remove the extra ones:
How to Remove UPI ID on Google Pay
- Open Google Pay and tap on your profile.
- Select “Bank account” and find the extra UPI ID.
- Follow the instructions to remove it.
How to Remove UPI ID on PhonePe
- Open PhonePe and access “My UPI ID.”
- Select the extra UPI ID and delete it.
How to Remove UPI ID on Paytm
- Open Paytm and go to “Manage UPI.”
- Choose the extra UPI ID and remove it.
How to Solve UPI Registration Failure
If you face issues while registering for UPI, contact your bank, as they can allow or restrict UPI transactions based on account status. Reasons for registration failure include:
- Incomplete KYC.
- Wrong or no mobile number linked with the bank.
- Other incomplete banking formalities.
Conclusion
UPI has completely changed the way we transact in India, making digital payments accessible to all. It’s a secure, efficient, and inclusive system that has simplified everyday transactions, making it possible to send and receive money with just a few taps on your phone. The move towards a cashless economy, spearheaded by UPI, is turning into reality, transforming the financial landscape of India. As UPI gains traction, it will become more than simply a trend; rather, it will permanently change the way we manage our finances and bring in a new era of digital payments.
FAQs
How does UPI make sending or receiving money easy, safe, and instant?
UPI provides an easy registration process on apps from the App Store or Play Store, with dual security through mobile and UPI PINs, ensuring safe and instant money transfers between bank accounts.
Will I be able to use UPI across all mobile platforms?
Yes, UPI is available on both Android and iOS.
Where can I use UPI?
UPI can be used for sending money, bill payments, shopping, food delivery, cab rides, and more.
What happens if I forget my UPI PIN?
Reset your UPI PIN using your debit card details (last six digits and expiry date).
Can I link more than one bank account to the same UPI ID?
Yes, multiple bank accounts can be linked to a single UPI ID.
