UPI

What is Unified Payments Interface UPI? How does UPI work?

Mobile phone showing how Unified Payments Interface works

Imagine, what would you do if you went to a petrol pump to refuel your vehicle and realized that you had forgotten your wallet? Or, when even after providing a service to your client you don’t get paid because they don’t have enough cash in hand? Sounds pretty irritating, right? This is where Unified Payment Interface (UPI) steps in to ease the process of sending and receiving money.

You must be wondering what a unified payment interface is. To give you a hint- It is a crucial payment method that has become a part and parcel of our lives. Right from getting groceries to petrol and diesel, medicines to transportation, there is nothing that does not allow for a transaction using a Unified Payment Interface. Reason enough for you to know more about Unified Payments Interface.

What is Unified Payments Interface UPI?

Unified Payments Interface is a unique technology wherein you can use a single app to manage all your funds, avail of banking services, and pay any merchant via any bank that chooses to participate. It allows for instant payment in real-time and can be used to transfer funds between the participating banks. So the next time you get petrol/diesel for your vehicle, you can simply use an app on your phone to immediately transfer money to the petrol pump. Phewww!

UPI also makes use of a ‘peer-to-peer’ model which can be pre-scheduled and paid for as and when the need arises. 

The salient features of a Unified Payments Interface UPI are

  • It is a real-time payment app that can be used on any smartphone to pay/receive money instantly. 
  • A fully digitized system with 24*7 access, from any part of the world.
  • It is a quick, user-friendly, and hassle-free mode of transaction.
  • With a UPI, you need not enter your banking details every time you conduct a transaction. 
  • A safe and reliable method of transaction that eliminates the need to carry cash everywhere you go.

How Unified Payment Interface works?

UPIs are tech-enabled apps that use Aadhar-Enabled Payment Systems (AEPS) and Immediate Payment Services (IMPS). The Unified Payment Interface works by push-and-pull transactions, barcode payments, and recurring payments such as electricity bills, house rent, mobile recharges, etc. 

To begin with, you need to set up your profile on the UPI and save your banking details for smooth transactions. Once you have done this, you need not use any of your debit or credit card, cash, or banking information. You can then proceed to link your bank account with your UPI.

Sending money using Unified Payments Interface UPI (Push)

Log into your UPI and select the option to Pay/send money. You will be asked to enter the virtual address of the merchant/receiver and the amount you wish to pay. Go on to select the bank account you want to pay from. The UPI will also ask for your Personal Identification Number (PIN) or a confirmation code as a security check.

Receiving money using UPI (Pull)

Log into your Unified Payments Interface and opt for the option to receive/collect money. Complete the process by entering the sender’s virtual ID, and the amount along with your virtual address where you want to receive money. Once the sender enters his PIN, the transaction is completed.

For example, when you ship cargo for your client, you can share your UPI id with them after delivering the cargo to collect your payment even if they don’t have real cash in hand.

Both the sender and the receiver of the funds get notified by the UPI upon the successful completion of the transaction. 

Who manages all the UPIs?

Developed by the National Payments Corporation of India, UPIs are now under the control and management of RBI and IBA (Indian Bank Association).

Which banks support UPI?

The majority of banks support the unified payments interface market since it is safe, secure, reliable, and simple. Its user-friendliness has made it a hit with the masses, with more and more people opting for this cashless, hassle-free transaction. You can reach out to your bank’s customer support service to know about their UPI support. There are many banks that allow UPI transactions. Some of them are:

  • BI (SBI Pay)
  • ICICI Bank (i Mobile)
  • HDFC Bank (Mobile Banking)
  • Vijaya Bank (Vijaya UPI)
  • United Bank of India (United UPI)
  • Yes Bank (Yes Pay)
  • UCO Bank (UCO UPI)
  • Axis Bank (Axis Pay)
  • Bank of Maharashtra (Maha UPI) 
  • Federal Bank (Lotza)
  • Bank of Baroda (Baroda mPay) 
  • Karnataka Bank (KBL Smartz) 
  • South Indian Bank (SIB MPay)
  • Punjab National Bank (PNB UPI) 

What are the uses of a Unified Payments Interface?

The UPI market has become extremely popular because of its smooth transactions. It is commonly used for transferring funds from one bank to another with an immediate effect. A single app allows you to send money to or receive money from a merchant, service provider, or shop. 

If you are getting an all-India permit for your goods vehicle, you can pay the required amount using UPI. If you are at a petrol pump to get fuel, UPI helps you pay even for that. Your client whose cargo you delivered today owes you money, but it’s a holiday and the banks are shut. What do you do? You ask them to transfer money via a UPI, and you get your money in an instant, no matter where you are. 

How does a unified payment interface work safely?

Unified Payments Interface uses the 2-factor authentication process which is aligned and approved by the regulatory bodies. The 2-factor authentication process requires a user to enter the MPIN before completing any transaction. Since the transactions are end-to-end encrypted, the transfer of funds happens seamlessly with utmost safety. 

What are the benefits of using a Unified Payments Interface UPI?

Unified Payments Interfaces are being widely used for their simple single-click transaction process. The multiple benefits of using a UPI make it the most preferred mode of transaction. Some of the benefits are:

  • Hassle-free and fast transaction
  • No need to carry real cash or plastic money
  • Works anytime, anywhere
  • Reliable and user-friendly interface
  • Supported by most banks
  • Instant transfer of funds
  • Easy for bill payments
  • Manage recurring bills smoothly
  • Widely accepted by service providers and merchants

Conclusion

The unified Payments interface has gained popularity as an instant fund-transferring platform. Authorization and approval from government authorities such as the National Payments Corporation of India (NPCI) and Reserve Bank of India (RBI), along with the Indian Bank Association (IBA), make it a completely safe platform to trust your money with.

Try it out for yourself and see how seamless the entire process of UPI payment is. Use Vahak Payments feature to start using UPI for your transport business. To get started, you can connect with our team at Vahak.

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