India has been consistently moving towards growth and progress. The incorporation of new age technologies in our daily activities is helping India climb up the ladder of development at a noticeable pace. One of the latest addition to these technologies is the digitization of the money. From hard cash, we moved to online payment and now, thanks to demonetization, we are moving towards a cashless economy with the help of Unified Payment Interface. UPI Services was officially launched in January 2016, but it took the nation by storm when a lot of cash was withdrawn from the economy. Almost all the banks and many independent financial institutions came out with UPI backed digital wallets.
What is Unified Payment Interface?
UPI is an application through which people can easily transfer money from one account to another, from their phone. It works very much like an e-mail. You have a unique id which you use in order to make and receive correspondence. Only in this case, the give and take is of money. This system is introduced by the National Payment Council of India (NPCI), set up by the Reserve Bank of India which regulates the UPI application. The application works on a single interface infrastructure which helps in inter-connecting various banks across India. The system on which UPI functions is known as Immediate Payments System or IMPS for short.
How do we operate UPI?
When you try to make a payment through net banking, you have to go through the long and tedious process of feeding in your details such as name, account number, IFSC code and then add the beneficiary. In general some banks take up to 12 hours to add a payee to your account. You have to repeat the entire process the next time you have to make or receive payments from a new member who is not yet added to your bank account.
With UPI all these tiresome acts are avoided. The UPI interface enables the account holders to receive and transfer money using just their smartphones with the help of a Virtual Payment Address or VPA. This VPA or unique identity of the UPI holder can be his or her Aadhaar number, mobile number or any other detail which can help the system recognize the UPI holder easily.
Almost all major banks in India are now UPI enabled. If your bank is among these UPI enabled banks, then you can ask them to integrate your account to the system. There are two kinds of identities to initiate your transactions. One is global and the other local. The global includes your aadhaar number, account number and mobile number. For the local identity it could be a virtual identity that you chose. This virtual id is like email address for your account. This virtual address will enable you to transfer money to another account within your bank as well as any other bank that is UPI enabled and integrated with your bank. This helps you avoid the constant need of adding beneficiaries, feeding in your account details and then waiting for hours before the money is transferred. UPI is all about instant money transfer.
How do I register for UPI service?
To be able to use UPI services, you need to first download the UPI application, preferably that of your bank and then register yourself with UPI to start the transactions.
The steps to get a UPI in your phone are as under:
- Download the UPI app on your phone.
- Open the application and follow the instruction as given. You will have to type your basic details such as name, account number, IFSC. These details are only needed at the time of registration. After this you can transact with your VPA.
- You will only be asked for your 4 digit MPIN. This is like your ATM pin and should never be shared with anyone.
- After having done the registration, a request will be sent to your bank, for integrating your number with your bank account. You must make sure that the mobile number that you use for the UPI services and the one registered with your account are the same. This is important for a seamless transaction.
How is UPI helpful for me?
With the use of UPI you can simplify your monetary transactions to a great extent. Once you have registered with the UPI application, you can make transactions via your smartphone with a click. You will not have to rely on NEFT or IFSC or net banking. Just ask your bank service provider to integrate your account with UPI and you will be ready to make transactions from your phone. Getting your bank’s UPI application on your phone will be much beneficial for you as it will also work like a digital wallet for all your other expenditures.