- Date : 27/04/2022
- Read: 4 mins
How does the UPI facility work? here's all you need to know about the UPI apps and their functioning.
The COVID-19 pandemic necessitated digital money transfers. It was impossible for people to visit the banks during a series of lockdowns. It was during this time that people took to UPI apps to make the necessary transactions. In the last two years, the UPI facility played a key role in propelling India's digital economy.
Let's understand more about the UPI facility
What is UPI?
Unified Payments Interface or UPI is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing & merchant payments into one hood. UPI lets your mobile phones function as a debit card, and you can use it to do real-time bank to bank transfers. All you need is a UPI id and the PIN to make financial transactions within minutes.
Also Read: 42% of Indian Consumers Prefer Digital Payments- Survey
UPI was initiated by the National Payment Corporation of India (NPCI). The Reserve Bank of India (RBI) and the Indian Banks Association (IBA) were part of its initiation. The NPCI also initiated IMPS, or Immediate Payment Services, but the UPI is a more advanced version of this IMPS.
Also Read: Google Pay Personal Loans- Application Process
How does UPI work?
Just a few years ago, transferring money to a bank account used to be a complicated process. However, UPI has made the process easy and smooth. Now, you don't need too many details to send money; all you need is the receiver's UPI id or the mobile number registered with the UPI id.
Setting up a UPI id is simple and requires one to follow a few simple steps. First of all, install an app that supports the UPI services, and then provide the required details of your bank account. You will receive an OTP on the mobile number linked to your bank account. Once it is verified, you will be asked to create a PIN. Don't share the PIN with anyone. Once the process of creating the UPI id is completed, you will be able to view your UPI id, which is in the format of "(mobile number)@(the app)".
Also Read: How Digital Payments Are Changing the Face of The Indian Economy?
What is a UPI ID and PIN?
The UPI id enables you to send and receive payments. To make any payment using the UPI, you need to provide a 4-digit number, which is referred to as UPI PIN.
Features and benefits of using UPI
- UPI simplifies online payments.
- Making a payment on online shopping sites is much more easier and secure.
- You can easily make online transactions at the nearby departmental stores.
- Mobile recharges, electricity bill payments, etc., can all be done online from the comfort of your home.
Are UPI transactions secure?
Yes, the UPI ensures that your transactions are completely safe and secure. UPI uses such an encryption format that it is very difficult to tamper with. Also, as a second factor authentication, an OTP verifies each transaction that you intend to make. This two-factor authentication makes the process safe.
Which banks support UPI?
Almost all the major banks in India support UPI payments. Some of the major banks accepting UPI payments are as follows:
- ICICI Bank (imobile)
- Axis Bank (Axis Pay)
- Federal Bank (Lotza)
- State Bank of India (SBI Pay)
- Bank of Baroda (Baroda MPay)
- Punjab National Bank (PNB UPI)
- Yes Bank (Yes Pay)
Which are the popular UPI apps?
PhonePe, which covers more than 40% of the market share, is a popular UPI app. Next comes Google Pay with a market share of about 30%. The rest of the market is occupied by payments apps like Amazon Pay, Paytm, Bhim, etc. With the increasing usage of UPI transactions, the demand for the UPI apps is on the rise.
