India has taken an important step toward creating an economic system that is cash-free through the introduction of the Unified Payment Interface (UPI). The new payment system allows users to use their smartphones as online debit cards. It also makes the transfer and receipt of money instantly. The QR code concept eliminates the need for digital wallets completely.
What is UPI?
UPI is an integrated platform that brings different banking services and features under one roof. The UPI ID, as well as the PIN, are enough to make and receive payments. Real-time bank-to-bank transfers can be done using a mobile phone number or a virtual payment address (UPI ID).
Who started UPI?
UPI is an initiative launched by the National Payments Corporation of India (NPCI) in conjunction with the Reserve Bank of India and the Indian Banks Association (IBA). NPCI is the organization responsible for managing RuPay, the payment system, i.e., Visa or MasterCard. It permits different banks to connect to transfer money. Immediate Payments Service (IMPS) is also a project of NPCI. UPI is regarded as the more advanced variant of IMPS.
What are UPI ID and PIN?
The UPI ID can be described as a distinct identifier for banks’ accounts that are used to transfer and receive money. UPI PIN is a four-digit personal identification number that must be entered to authorize the transfer of funds via UPI. The PIN is selected by the person who holds the account.
What exactly is the UPI function?
UPI has made money transfers much simpler. It is no longer necessary to keep track of the number of the account holder’s account or the type of account, IFSC, and bank name. You can instead make the transfer solely through the receiver’s Aadhaar number, a mobile number associated with the bank account, or the UPI ID. You can create a UPI ID with one of the applications that offer UPI service. The majority of UPI ID starts with your mobile number, followed by the ‘@’ symbol, and is followed by the app that you use. This ID could be established by entering the details that are associated with your banking account in the app. The app will then send an OTP to your mobile number in order to confirm that you’re an authorized person. After entering the OTP and confirming it, you will be asked to enter an account with a PIN to access that UPI ID. After completing the registration, you will be able to select any number in your contacts list and pay. It is also possible to request funds from any person on your contact list.
What are the benefits and advantages of UPI?
- Online payment is made easier.
- Pay for hailing services as well as food delivery services and online shopping websites with UPI payments that allow for instant funds transfer.
- Pay at your nearest restaurant, grocery stores, restaurants, and departmental stores on the internet.
- Mobile recharge, rent and utility payments can be made online and instantly.
Are they secure?
UPI transactions employ the most secure encryption format, which cannot be altered easily. The NPCI’s IMPS network processes around Rs.8,000 crore worth of transactions each day. The number of transactions is expected to increase using UPI technology. It utilizes an authentication process that is two-factor, like OTP, to verify each transaction. But, UPI PIN will be employed in place of OTP for verification.
What makes UPI better than or different from IMPS?
If a person uses IMPS service, it will take a mere just few seconds; however, this requires the user to enter the bank details over and over again, which is an arduous job. Additionally, the platforms offered by banks in the majority (websites or applications) weren’t the best. In essence, UPI is a better version of IMPS.
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