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With the advent of UPI, India has taken a big step towards creating a cashless economy. This innovative payment method converts your smartphone into a debit card, which means a virtual debit card. As a result, sending and receiving money is now quite simple. You will not be charged a commission or fee for any transaction made through UPI, whether for Rs 5 or 50,000. The concept of QR code has eliminated digital wallets. UPI’s entire system and software are maintained by the government, not only maintained but also upgraded regularly.
What is UPI?
UPI is a platform that brings together many banking services and features under one roof. A single UPI PIN (Unified Payments Interface Personal Identification Number) is enough to send and receive money. You can make real-time bank-to-bank payments using your mobile number or a virtual payment address, which is similar to UPI.
Is it secure?
UPI transactions use a highly secure encryption format that is difficult to circumvent. The NPCI’s (National Payments Corporation of India) IMPS (Immediate Payment Service) network processes transactions worth Rs 8,000 crore every day. And as technology advances, it will increase even quicker. This is done with a two-factor authentication approach similar to OTP which verifies each transaction. However, verification requires a PIN (Personal Identification Number) rather than an OTP (One-Time Password).
Who initiated?
The NPCI (National Payments Corporation of India), in collaboration with the RBI and the Indian Banks Association (IBA) Personal Identification Number, introduced UPI. Rupay payments, which are comparable to Visa and MasterCard, are handled by NPCI. It enables numerous banks to interconnect and transfer funds. The IMS (Immediate Payment Service) is an NPCI initiative. UPI is considered to be an advanced version of IMPS.
What are UPI ID and UPI PIN?
UPI ID is a unique identification of the bank that can be used to send and receive money.
A UPI PIN is a four-digit personal identification number that must be input whenever you transact money using UPI to approve the transaction. This PIN is set by the account holder.
How does it Work?
UPI has made money transfers easier. There is no need to remember the recipient’s account number, IFSC code, bank name, or anything else. Instead, if you have their Aadhaar number, registered phone number, and UPI ID, you can easily transfer money to their account. You may generate a UPI ID using any app that supports the UPI service. Most UPI IDs begin with the mobile number, followed by the @ symbol, and end with the app you’re using.
Ex– UPI ID – mobilenumber@upiname
If you are using Paytm then your UPI ID will be like this – 97xxxxxx90@upi
Setting up a UPI ID is easy; all you need to do is enter your bank details in this app. The app will send an OTP to your registered phone number to confirm that you are an authorized person. As soon as you enter UPI, you will be prompted to create a PIN. Once your registration is complete, you will be able to send money to any of your contact’s mobile numbers. They just need to be registered in that app. Not only that, but you can also request money from anyone on the contact list.
What apps allow UPI Usage?
Many apps support UPI payments; Some of the popular ones are Google Pay, Phonepe, Paytm, Mobikwik, etc.
The First Benefit
The first advantage of UPI is that it provides a better tracking method. Earlier, it was considered a good thing to keep a good amount of cash at home because there were no other means of transaction available in an emergency. But today there is no need to keep so much cash because, through UPI and digital banks, we can do transactions anywhere and at any time. Now, the government will benefit from this because they will have a record of all the transactions. It is good for the government, be it India or any government across the world, that the transaction of currency should be done through a digital medium as much as possible, and it should not be in cash because cash is difficult to trace.
Second Benefit
The second advantage is that money transfers have become much easier. Before 2016, when there was no digital currency in our country, individuals did not have a rapid medium for transactions that allowed them to transfer money from one location to another in real time. At that time, money transactions were conducted in cash, cheques, and drafts. However, all bank services are now available 24/7, with a single click on your mobile device. Any country’s business contributes significantly to its development.
Sometimes, online shopping websites offer big discounts to their customers, due to which people buy stuff that they do not even need. This is possible only because of digital banking. Because of this, the government may quickly obtain a large amount of data. This is extremely beneficial to the government in developing rules and regulations for these small to large businesses. As a result, many people are also getting jobs. In today’s time, UPI has also given new opportunities to people for doing business, due to which lakhs of people are getting employment every day.
Third Benefit
The third benefit was that banks were granted the authority to make loans. About six years ago, people kept their money in banks, but the majority of it was kept at home. People assumed that if they needed money in an emergency, they would have to go to the bank. However, in 2016, many people kept their money in bank accounts rather than in homes. Making UPI payments is so easy that people of all ages can use it easily.
