Unified Payment Interface - Another Real Time Funds Transfer Interface

UPI (Unified Payments Interface) will help users to link more than one bank account to a mobile app and fund transfers can be accomplished without mentioning the IFSC Code and account number. The system will ensure transfer of funds in real-time. Users can send and receive money by using the UPI system. The payment system was developed by National Payments Corporation of India (NPCI) and it is regulated by the Reserve Bank of India (RBI).

Benefits of UPI

  • Convenience - UPI has become the most convenient mode of money transfer.
  • Simple Interface - The UPI interface is designed to perform various kinds of operations very quickly. New users will be able to adapt to the system very easily.
  • Compatibility - The UPI interface has compatibility with various banks, digital payment systems and payment apps.
  • Integration with Social Media - There are attempts to integrate UPI on various kinds of social media platforms
  • Support - The app is supported by third-party applications, apps and banking apps
  • Easy - The fund transfer is accomplished very easily with UPI. By using VPA (Virtual Payment Address), the fund transfer can be accomplished in an effortless manner.

What is NPCI?

National Payments Corporation of India (NPCI) is instrumental in the development of UPI payment system. The organization works under the supervision of RBI and Indian Banks’ Association (IBA).

In the year 2005, BPSS (Board for Regulation and Supervision of Payment and Settlement Systems) was developed. The board had a vision document to develop multiple payment systems across the country. With the introduction of the UPI payment system, retail payments have been simplified and the system can be used by ordinary citizens as well.

Features of UPI

If you would like to transfer funds with an internet banking account, you will want to provide the IFSC code. You should Search IFSC Code and the IFSC code and bank account particulars should be provided in specified columns to accomplish the online transfer of funds.

  • Ability to send and receive funds
  • Fund requests
  • Merchant payments using QR code or BHIM
  • Payment for cabs

There are transaction limits for UPI payment.

  • You can send a maximum of Rs. 1 lakh in one day.
  • The maximum transaction per day is Rs. 1 lakh.
  • Number of UPI transactions per day is 20
  • Some banks will allow you to send up to Rs. 1 lakh per day such as ICICI Bank, SBI and HDFC. However, many banks will put a restriction of Rs. 10,000 per day.
  • You can send Rs. 10,000 per transaction by using the BHIM UPI
  • The maximum amount that can be transferred by using BHIM UPI in 24 hours is Rs. 20, 000.

Type of Transactions by Using UPI

The following type of transactions can be performed by using the UPI:

  • Bill Payments - You can pay various kinds of bills such as electricity bill, and phone bill.
  • Remittances - You can send and receive money very quickly by using the UPI interface.
  • Merchant Transactions - You will not want to provide Andhra Bank IFSC Code while transferring the money from the Andhra Bank mobile app.

Registration on the UPI App

For using the UPI payment system, you should register your details on the UPI App.

  • Download the App - The app can be downloaded from the Bank’s official website or Google Play App Store. Some banks will send the link to download the app so that you can download it safely and quickly. Even though you are required to use the mobile app as per the bank type, the registration procedure will be similar (more or less)
  • Open the App - After installing the app, you should open the app and a profile should be created successfully. The details that you should enter for registration include name, virtual ID (payment address), account details and appropriate password.
  • Add/Modify/Link Your Bank Account - Your bank account can be added or modified or linked very easily with the virtual id.

M-PIN Generation

To use UPI service successfully, you should use the M-PIN. The following steps should be performed to use the M-PIN successfully.

  • Select the bank account from which UPI payments should be done.
  • Select mobile banking registration (Generate MPIN) option
  • Tap on generate MPIN (OTP will be sent to the registered mobile number)
  • You should enter the last 6 digits of your debit card number and the expiry date
  • You should enter the OTP and MPIN (of your choice)
  • A confirmation message will be displayed on the mobile screen

Making Payments with UPI System

The following steps should be performed to make payments using UPI system:

  • Login to the bank’s UPI app
  • Select the option to make payment
  • Enter the beneficiary’s virtual ID and the amount
  • Confirm the payment details
  • Enter the MPIN
  • You will get either success or failure message

Receiving Payments with UPI Payment System

To receive payments through the UPI interface, the following steps should be performed:

  • Login to the UPI app
  • Tap the collect money option
  • Enter the virtual id of the payer or sender, amount and the account number
  • Review the payment information
  • Confirm the payment
  • The ‘money request’ will be sent to the payer
  • The payer should tap and click on the ‘sent’ notification
  • The payer will open the request on his/her mobile app
  • Payer can accept/deny the payment
  • The transaction will be authorized by entering the MPIN
  • The payer will get transaction status, ‘successful’ or ‘declined’
  • The recipient will get confirmation after receiving funds in his/her bank account

What is UPI 2.0?

UPI 2.0 is the latest version of UPI. It offers the following features:

  • Bill Payment - By using UPI, it is possible to may payments to others who have bank accounts. The UPI 2.0 further enhances the facility by extending the feature for bill payments as well. You can pay utility bills such as telephone, electricity bills. With the integration of BBPS, the bill payments will be done in a very efficient manner.
  • Pre-Authorized Transaction - With the implementation of the pre-authorized transaction, users will not want to deal with pending bills. The billers will withdraw funds automatically as per your authorization. It is possible to set maximum allowable deduction and number of transactions for a specific period of time. You can pay EMIs by using pre-authorized transactions.
  • Biometric Authentication - By using the fingerprint mapping technology and iris scanner, you can make secure online payments. The authentication of the identity of a person will be done by using aadhaar-based systems. The aadhaar database collected by UIDAI will be used for verification of details.
  • Check on Speed of Transaction - By performing velocity checks, the speed of transaction can be detected so that fraudulent transactions can be prevented. Some banks are already implementing velocity check to enhance the security of transactions. If there is any suspicious transaction, it will be reported by the UPI app and notification will reach the bank as well as customer.
  • Error Resolution - The current UPI interface demands unique mobile registration number. If the same mobile number is used by your family member, it will display an error message. The UPI 2.0 will resolve the issue.
  • Scheduled Payment - It is not possible to schedule a payment with UPI. With UPI 2.0, you can schedule a payment and there will be great flexibility.

Apps with UPI Compatibility in India

The following are some of the apps which have UPI compatibility:

  • Paytm
  • PhonePe
  • BHIM
  • MobiKwik
  • Airtel Payments Bank
  • Uber
  • SBI Pay
  • Axis Pay
  • iMobile

UPI Vs RTGS or NEFT

There is a difference between UPI and RTGS or NEFT. UPI is designed to accomplish mobile based phone transactions in a very efficient manner. It is based on the IMPS. UPI implements an easy-to-use interface. There will be delays in transferring funds by NEFT as the payments will be processed in batches. The UPI is meant for transferring funds less than Rs. 1 lake per day. The minimum transaction by RTGS is Rs. 2 lakhs and there is no upper limit.

UPI for Merchant Payments

If the merchant accepts UPI payments, customers can make payment through the UPI interface.

Features of Andhra Bank UPI

By using Andhra Bank UPI, you can perform various kinds of online transactions. If you are transferring money to Andhra Bank account from other banks, you should provide the Andhra Bank IFSC Code. When you use the UPI platform, the transfer can be accomplished without providing the IFSC Code. You will want to enter the unique identification number or virtual ID to facilitate the transfer of money.

To use the UPI-based app, the customer should register the mobile number with the Andhra Bank account number. The account activation will be done with the help of active debit card. Android version 4 and above supports the UPI app. The Andhra Bank UPI app is based on the BHIM App (Bharat Interface for Money). By using the app, customers will be able to transfer the money and perform various kinds of transactions.

  • Account management
  • Beneficiary management
  • Transaction inquiry
  • Quick transfer with instant payee addition
  • Single-click 2-factor authentication
  • Fund transfer
  • Balance inquiry

UPI Vs. IMPS

IMPS stands for Immediate Payment Service. NEFT and RTGS are popular means of online transactions. IMPS is a less popular online payment system. However, it has picked up its pace after the demonetization in November 2016. By using IMPS, money can be transferred at any time and IMPS was developed by NCPI.

UPI offers the following additional features which are not present in IMPS:

  • P2P functionality
  • Single app for money transfer
  • Single click for 2-factor authentication
  • Simplified merchant payments

IMPS Charges

  • For transactions up to Rs. 1 lakh – Rs. 5 plus service tax
  • For transactions between Rs. 1 lakh and Rs. 2 lakh – Rs. 15 plus service tax

To use IMPS, sender as well as receiver, should register with the bank and obtain the 7-digit MMID. The mobile banking should be enabled by the sender.

The money can be transferred in the following modes:

  • SMS - By providing MPIN, the sender will be able to transfer the money very easily.
  • Mobile App - The bank provides the mobile app and it can be downloaded from the official website of the bank. The money can be transferred by using the mobile app.
  • Internet Banking - By using the internet banking facility, the sender will be able to send the money to the beneficiary.

UPI-Based Transactions

UPI-based transactions are done by using the app. The transactions will be done by using the mobile phone and the virtual payment address. Hence, the number of steps involved in processing the transaction will be minimized. It is possible to make quick transactions with the UPI-interface.

You can download the UPI app from the Google Play Store or from the bank website. After accessing your bank account, you should generate the Virtual Payment Address (VPA) which is similar to the email address. After creating the virtual payment address, you will be able to make transactions successfully.

UPI Payment Charges

  • Peer to Peer transactions (UPI app to another user who uses UPI app) - no charges
  • Customer to the merchant - Rs. 15 (should be paid by the merchant)

Conclusion

The UPI transaction can be accomplished quickly and easily by using the app on your smartphone. The system facilitates direct payment to third parties without providing the IFSC code and account number. The system is implemented by more than 40 banks in the country and the service is available on 24/7 basis. UPI is the cheapest and reliable mode of payment system. Hence, it may take over other payment systems such as NEFT and IMPS. You can perform stress-free payments without providing your bank details.