Unified Payment Interface or UPI is the new payment system from National Payments Corporation of India (NPCI). This new payment interface can be used to transfer money through mobile banking transactions. To transfer an amount, it is not needed to know the details like bank account number, IFSC code, bank branch detail of person. You can install a simple mobile app in your smart phone and use this payment system with your Unique ID.
While talking about the new Unified Payment Interface system, National Payments Corporation of India (NPCI) managing director and CEO A P Hota said,
“Our focus is in line with RBI’s vision of migrating towards a ‘less-cash’ and more digital society. NPCI has always been at the forefront to innovate and introduce new products and services at par with global standards.”
You have to provide the MPIN to initiate fund transfer through UPI. No OTP will be required to transfer the fund. Being an interoperable system, amount can be transferred to any bank supporting UPI. Total 29 banks is launching this service in the first phase. The best part is, the Unified Payment Interface facility is a 24/7/365 funds transfer service.
What is UPI NPCI (Unified Payments Interface)?
Unified Payments Interface or UPI allows multiple bank accounts to offer several banking features from a single mobile application. The participating bank can do seamless fund transfer and several types of payments through a single interface. Peer to Peer collect request can also be scheduled and paid as per the convenience. Unified Payment Interface (UPI) will make money transfer as simple as sending a text message and revolutionize the way mobile banking is done.
The payment interface is the advanced version of NPCI’s Immediate Payment Service (IMPS) which will be available 24×7, 365 days. You can use the UPI app for expenses like paying utility bills, counter based payments, Collections, donations, school fees and other such cases. You can also schedule push and pull transactions for various purposes like sharing bills and many such.
How UPI Works?
UPI will offer you an email-like virtual address – for example 1234567890@sbi. All your confidential information will be seeded in an encrypted form. One can also use the mobile number as the name. You can have multiple virtual addresses for multiple accounts in various banks. One can share the financial address with others freely as there will be no account number mapper anywhere other than the customer’s own bank to ensure data privacy.
Suppose if you want to pay bill to an auto driver, you need to give your virtual address and the driver will then request for money. The system will send you message asking for authentication. The transaction will be complete once you authenticate the system with your password. Either you can also transfer the fare using auto-driver’s mobile/Aadhar Card number.
Currently net banking requires a lot of preliminary steps like adding the payee, generating one time password (OTP) at the time of payment etc. The mobile wallets are convenient though but they need to be filled in with debit/credit card or NEFT.
The UPI payment interface is independent from any platform, which means any bank user can easily send money to any other bank account holder. So when UPI would be fully operational, dependency on a particular mobile wallet or a bank account will be wiped out.
Unified Payment Interface (UPI) Features
- UPI runs on Immediate Payment Service (IMPS) platform which will be available 24/7/365
- It is an inter-operable system which will operate across different banks
- Virtual address as a payment identifier for collecting and sending money
- Single click two Factor authentication for subsequent transactions
- Instant Payments can be made through the customer’s mobile or Aadhaar number.
- The UPI platform allows to transfer funds without knowing the receiver’s bank account, IFSC code.
- In the first phase, 29 banks will operate the platform.
- Schedule, Push from the customer and Pull by the supplier of services or goods for various purposes
- It is a one stop solution for many Payment types like Utility Bill, Counter based Payments, Barcode based payments, Donations and many such needs
Benefits of Unified Payment Interface (UPI)
- Universal Single APP for accessing through multiple accounts of different banks.
- Round the clock availability whereas other payment systems are available for a specific time period.
- No need of sharing any credential with use of Virtual ID for more secure gateway
- Instant cashless transaction with no timeout scenario
- Seamless fund transfer with Push and Pull facility.
Unified Payment Interface is the best answer to Cash on Delivery hassle or running to the nearest ATM. It is a very strong step towards Government’s Digital India initiative. With UPI, every citizen of India will be able to utilize the benefits of mobile banking and technology using either through Aadhar Card or mobile number. Please feel free to share your thoughts about this new payment interface.