What is UPI? | How Does It Works?

What is UPI | UPI is an instant payment system that facilitates the transfer of money between different banks using a single unique address (VPA). In a nutshell, it’s an application-based interface that can be used on a smartphone.

The National Payments Corporation of India (NPCI), a regulated entity by the Reserve Bank of India, developed UPI. IMPS (Immediate payment service) is an advanced version of UPI.

UPI stands for Unified Payment Interface. (what is UPI)

National Payments Corporation of India (NPCI) has developed BHIM, an Indian mobile payment app.

Transferring Money Through UPI In Different Ways

1] Bank Account Number+IFSC Code

2] VPA

3] Aadhaar Number

4] Your Mobile Number+MMID (mobile money identifier)

The UPI Is Better Than The IMPS

Bank’s IFS code.YESNO
If your customer owes you money, can you ask him for itNOYES
Rate of payment successMEDIUMHIGH
Charges for successful transactions5.50 Rs0.5paisa
The details of the other beneficiary’s bank account.YESNO

How Does UPI Work?

VPA is used for all UPI transactions

VPA is a payment type in UPI. What is it?

VPAs for UPI payments are nothing more than e-mail addresses like yourname@bankname. A UPI payment system should link a user’s bank account to their VPA.

VPA stands for Virtual Payment Address, as well as Unified Payment Interface (UPI) ID. After users generate IDs from UPI applications such as Google Pay, PhonePe, and Paytm, VPAs enable UPI services.

You will need to create and link your UPI VPA only once, and this will be your payment ID for all UPI transactions.

You do not need to remember account numbers, IFSC codes, or other internet banking credentials to transfer or receive funds from other users. Money can only be sent or received to two virtual payment addresses.

Difference Between NRE And NRO Account 

How To Send Money Via UPI?

Open the app, enter your pin

Click on Send Money after opening the app. To send money, choose a bank account. Select the receiver’s VPA (virtual payment address). As you keep doing transactions with different payees, the VPAs of those payees are automatically saved. You need to enter the amount, write your remarks for the transaction, click the send button, then enter your UPI MPIN after the transaction is successful.

The Most Popular UPI Apps In India

UPI apps have been released by some banks, while others have integrated the UPI payment feature into their mobile banking apps. Here are some of the most used UPI apps in India.

  1. BHIM app
  2. Gpay(Google Pay)
  3. PhonePe
  4. Paytm
  5. Amazon Pay UPI
  6. MobiKwik

Also Check: How To Create SBI Virtual Credit Card