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Full Form, Registration, PIN, and Mobile App: All about UPI

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Through different channels and reforms, India’s digital drive has pushed the country toward a cashless economy. UPI is one such digital breakthrough that has eased digital transactions.

The National Payments Corporation of India (referred to as “NPCI”), the apex body that handles money transfer systems in India, created UPI in 2016. The Reserve Bank of India manages the NPCI, and its principal purpose is to propel India toward becoming a digital economy. In this article, we will discuss UPI full form, what exactly is UPI, how you can open an account, and if it is safe to use UPI.

What is the full form of UPI Payment System?

The full form of UPI Payment is Unified Payments Interface. UPI is a system that allows a person to transmit money from one bank account to another instantaneously with a phone. You may receive or transmit money and scan a QR code to pay a person, pay bills, shop, etc.

All you need to make payments through your phone is an application supporting UPI and the payee’s digital address (like myshop@abcbank). Thus, you can transmit payments straight to a vendor’s or a person’s account in just one step. 

What exactly is UPI?

Unified Payment Interface is similar to your email address and may be used as your financial address. This, like your bank account, is unique to each person and will allow you to send and receive money promptly. As a result, you no longer need to transfer payments intrabank using traditional techniques such as RTGS, NEFT, and cheque. 

UPI account means an account through which you can do transactions instantly from your phone. Payments happen at great speed without any hindrances as UPI allows you to do transactions 24 hours a day, 365 days a year. Presently, a single UPI transaction may transmit up to INR 1 lakh.

How does UPI function?

UPI has considerably streamlined the money-transfer process. You do not need to remember the account type, account number, bank name of the receiver, or IFSC. You can only transfer funds if you have their Aadhaar card number, a mobile phone number linked to your bank account, or a UPI ID, which you may create on any app that supports the UPI service. A UPI ID often starts with your phone number, is followed by the ‘@’ symbol, and ends with the app you’re using. If your phone number is 90xxxxxx80 and you use the Paytm app, your UPI ID may be ’90xxxxxx80@paytm’.

Putting your bank account details into the app will generate the UPI ID. To confirm that you are an authorized user, the application will send an OTP to your linked cell phone number to confirm that you are an authorized user. Following the entry of the OTP, you will be prompted to set a PIN for the UPI ID. After completing the registration process, you will be able to transfer money to any cell phone number in your contacts. You may also request funds from anyone on your contact list.

How to Open a UPI Account

A UPI account may be created in five simple steps:

  1. To use UPI for cashless transactions and expeditious money transfers, you’ll require a bank account with a bank member of UPI and a smartphone.
  2. Your cell phone number should be registered in your bank account details. Currently, most Indian banks are members. In 2016, only 21 banks adopted UPI. This figure has been increased to 216 banks by 2021.
  3. Next, install any UPI-compatible app on your cell phone. Some well-known UPI apps include PhonePe, BHIM, SBI Pay, Google Pay, Paytm, MobiKwik, BOB UPI, and Amazon Pay.
  4. After you download the app, the software will require you to make a virtual ID. This is your unique ID for sending or receiving UPI payments. The bank will then send you an OTP (one-time-password) to confirm that the bank account is yours.
  5. You can create your VPA (Virtual Payment Address) once the verification is complete.

Is it safe to use UPI?

The NPCI considers UPI the most secure means of making cashless payments. Certain safety factors support this assertion:

  • Verification Security: The first element is cell phone number verification during the initial registration. This ties your UPI account with your phone number, transforming it into an identification method. If you update your mobile number, the verification procedure must be restarted.

If you lose your phone, you can block the number, blocking any future transactions from your bank account. This serves as a safety measure against identity theft.

  • Protection During Money transfers: When you sign up, the UPI allows you to create a 4- or 6-digit mobile pin referred to as the MPIN. The MPIN, when once created, can be used to validate every transaction. Since your MPIN is unique to you, no other person can make payments from your account using the app on your phone.
  • Protection During Verification of Parties: Another feature of the UPI framework is the ability to authenticate merchant identities to minimize fraud. The QR code and verified intent option let you know whether or not the merchant is UPI-verified. You are promptly notified if any merchant you interact with is not UPI-certified. The danger of QR code tampering is also relatively low, which boosts the trustworthiness of UPI transactions.

Conclusion

The NPCI has built a robust payment infrastructure that enables hassle-free and cashless payments by bringing the UPI. It is pretty easy to learn and utilize with the numerous payment applications and easy procedures for registration and beginning transactions.

The NPCI estimates that UPI system users will reach 500 million in a few years, indicating that cashless transactions will increase exponentially in India.

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