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UPI (Unified Payment Interface) is a real-time payment system that helps in instantly transferring the money between two bank accounts through the mobile platform. Hence, it allows multiple bank accounts to get into a single mobile application. The concept of UPI was developed by The National Payment Corporation of India (NPCI) in a view to make India more cashless economy by using the latest technology.

Key drivers of UPI

Some of the key drivers of the UPI are as under:

Simplicity: The concept behind the UPI was to make the application as simple as possible. Transactions carried out on application should be as simple as swiping a phonebook entry and making a call. An account holder should be able to send and receive money through their smartphone with only virtual payment address (VPA) without using additional account information. All they need to do is to pay to or a request from a payment address (like Mobile number, Aadhaar number, Account number, VPA, MMID or Mobile Money Identifier, etc.) with a single click.

Innovation: The idea here was to come up with a solution so that application providers can take advantage of enhancement and innovative user interface features in mobile devices without having to change the whole interface.

Adoption: Taking the size of the potential user base into consideration, the idea was to find a solution which should not crash and be scalable to a billion users. It should allow gradual adoption across all smartphone and feature phone users and provide full interoperability across all payment players, phones and between multiple identifiers such as Aadhaar number, IFSC, mobile number, and virtual payment address (VPA). Smartphone users should be able to send money to others who are not using a mobile application and vice versa.

Security: Security was one of the significant areas of concern. The solution had to provide end-to-end strong security and data protection from phishing, risk, scoring, etc. It should offer 2 Factor Authentication for convenience. 2 Factor Authentication is quite similar to OTP.

Who can use UPI?

Anyone with a smartphone and a bank account can use UPI for either transferring or receiving money online.

How is it different from the other mode of payment?

Other methods of payment need account holder’s bank IFSC code to make any transaction, which reveals bank account details. But while using UPI, all one needs is a virtual address which is unique to you and it encrypts the bank and personal detail of the user or the receiver behind it.

What is the level of security in UPI?

The interface is based on aSingle Click 2 Factor Authentication i.e. with one click the transaction is authenticated at two levels. The users will need a mobile pin called MPIN and a virtual ID issued by the application provider. With a click the transaction is verified; if the mobile pin matches with the virtual address, only then the transaction is processed.

How does it work?

It is simple if you use a smartphone. For accessing the UPI service, the users need to link their mobile number to the respective bank account and follow the following steps.

• Install any UPI application, for example, BHIM, from Google Play Store.
• Apple Store Select the correct mobile number which is registered with the bank
• Select the bank in which you have your account
• Update last six digits and expiry detail of your ATM Debit Card
• Create your UPI PIN (6 digits)
• You will have to provide this code (UPI PIN) each time for transaction authentication to initiate a transaction
• Create app PIN (4 digits)

Benefits of UPI

• Round-the-clock availability
• Instant transfer of fund through IPS (Instant Payment Service)
• Single mobile application for accessing various bank accounts
• Allows transaction with Virtual ID – no need to share credentials repeatedly
• Bill sharing facility
• Best for doing merchant payment, utility bill payments, in-app payments, OTC payments, Barcode based payments.
• One can file a complaint from Mobile App directly

UPI is a digital payments system which makes its operations available 24*7*365 days unlike NEFT which allows 23 limited settlements in a day, starting from 8 a.m. to 7:30 p.m. and is not operational on 2nd and 4th Saturdays of the month. Because of these features of UPI, India is moving closer towards becoming a cashless economy. For more information in this regard, please contact Afinoz.

What is Afinoz?

Afinoz.com is India's foremost online financial marketplace for availing loans and investments. Our main objective is to make the process of getting a loan or making an investment safer, convenient and hassle-free for individuals. We work with public and private banks, NBFCs and mutual fund houses across the entire country and offer an unbiased quotation on financial products. You can contact our team to get more information or apply for a loan or investment by calling on 0120-411-0376 or by emailing at info@afinoz.com Afinoz.com provides solutions which are quick, reliable, transparent, confidential and above all free.