Ancient teachings remind us that the sublime path towards development lies in harmony and adaptability to the world around us. Thus, no country or nation can afford to close its doors upon the cavalcade of changes that are occurring the world over. India is also no exception to this. When the world is moving at break-neck speed to digitize itself in order to liberate global citizens from the pangs of mortal intervention, India must also follow suit. Digitization is in fact a significant asset of the brand â€˜Shining Indiaâ€™. Thus, as a part of this digital financial transactions ate acquiring a strong foothold in the country.
One significant development in the progress of Digital India is the introduction of UPI. It is an acronym for Unified Payments Interface. It is basically a digital medium for carrying out financial transactions without the barriers of time or place or even cash. One needs to have oneâ€™s smartphone in handy which then acts as a debit card. Launched by the National Payments Corporation of India (NPCI), the UPI Process is relatively hassle-free and avoids all the disadvantages of traditional payment modes such as NEFT or RTGS. In fact, this has actually been a stimulus in the right direction for the economy allowing entrepreneurs to launch their own platforms for payment and has helped banks including PSEs to upgrade their systems.
What is UPI?
UPI is nothing but an advanced mode of cashless transaction that is carried out from the comfort of almost any place and anywhere. It is an upgraded version of IMPS that is tailored to the needs of an advancing age and in order to counter the problems associated with cash transactions including the problem of soiled currencies. Most UPI applications nowadays offer huge incentives to the customer for switching their mode of financial transactions to the platform. These incentives take the form of gift coupons, offers and cashback. All you need for a UPI transaction are a unique Iâ€™D and PIN. In fact, the ID is an individual’s financial address that is completely unique and exclusive to the particular individual.
The UPI Process
The process of UPI application is completely hassle-free. There is absolutely no need at all for the sensor to be acquainted with the receiversâ€™ bank account details or IFSC number or any other such information. The only necessary information pertains to the AADHAAR number or the phone number to which the bank account is linked. The nomenclature of an UPI ID usually comprises the phone number linked to the account followed by the name of the interface that is being used. An example would be 629xxxxx90@paytm, in which Paytm is the UPI interface. First and foremost, initiation of the UPI Process requires its activation. Thus, the activation of the same requires the following essentials:
- An active Bank Account
- Net Banking facilities associated with the respective account.
- An active mobile phone number
- A proper and sound internet network with an active recharge plan.
Once these essentials are in place, the activation of the UPI account can follow. The steps that need to be followed for the process of activation of UPI can be detailed as follows:
- There are umpteen platforms by banking as well as online banking companies. Any app that is of convenience and is suitable for the phone of the concerned user can be downloaded.
- The application will need the bank account details of the individual. The correct details must be provided. The app will cross-verify these details and fetch the details of the particular bank account.
- The app will send an OTP or One Time Password on the phone that is linked to the respective bank account. This OTP will have to be entered for the purpose of authentication.
These steps will ensure that the application is activated on the phone of the user. Following this the application is ready to be used and one can initiate the UPI Process. This can be done by fetching the UPI ID of any beneficiary and sending money in that IS. It must be mentioned that if certain contacts in the phone of the user are already registered with the app, transactions can be initiated with them instantly. Besides, one may also find certain auto-registered businesses in the App which will enable one to carry on financial transactions with them.
The UPI Process is an essentially encrypted process. This implies that financial transactions can be carried out without the disclosure of the details of the bank accounts of the receiver or sender. There are essentially three ways of using the application for financial transactions. These are as follows:
- Scanning of the QR Code of an entity in order to make instantaneous payment.
- Addition of the bank account details of the beneficiary in order to initiate the transaction.
- Fetching the UPI ID of the beneficiary so as to send money directly into the account in Real Time.
Features of UPI
NPCI constantly updates these interfaces. The latest version is 2.0. The features associated with version 2.0 include the following:
- The one-time mandate facility of the application allows the user to initiate a transaction without actually completing the process of payment. This implies that the transaction enters into a lock-in facility for a certain duration of time for the purpose of completing the transaction later. Being an encrypted system, merchants and businesses find it very convenient and swift.
- The app allows an invoice mentioning the transaction details to be sent to the customer for verification. Following This, the customer can proceed with the transaction
- Registering oneâ€™s overdraft account with UPI is also permitted now. Prior to the upgrading of the system only savings and fixed accounts could be linked. However, the latest version not only allows the linking of overdraft accounts but also has enabled the raising of the transaction limit from 100000 to 200000.
- The security features have also been upscaled. A transaction that is done by scanning the QR Code now sends an alert to the customer in case of an unauthorized dealer. Besides no details of Cards are required to be shared through this medium.
Advantages over other platforms
The various benefits and advantages that sets UPI apart from other mediums of transaction can be detailed through the following table:
|UPI||Other payment interfaces|
|Allows money to be transferred freely||A 5% charge is levied for transactions.|
|Fecund for transactions upto 200000||Small transactions can be avoided owing to the high charge levied.|
|The system is encrypted and only requires an MPIN||â€˜ll banking details including the Account number and IFSC needs to be entered.|
|This is much more secure||Cashless exchanges in this platform are avoided due to security concerns|
|Swifter and more convenient transfer is possible in Real time||It takes upto 24 hours for processing of payment|
|All bank accounts can be linked to one app||There are separate apps for separate bank accounts|
|There is no interest lost in the process of payment||The amount of interest loss depends on the choice of the app|
We can now proceed to enumerate in details various procedures associated with the use of this application.
Registering carries with it the cumbersome thought of a whole lot of paperwork. With UPI The process is swifter than never before.
- All one needs to do is to download the app
- Put in the required details associated with oneâ€™s bank account and the corresponding phone number
- Verify and authenticate oneself by entering the OTP received on the number
- Explore a lifetime of opportunities by getting started
MPIN Generation from OTP
The MPIN allows the customer to maintain a confidentiality in initiating transactions thereby ensuring a safe environment for financial exchange.
- One must opt for a bank account whence transactions will be carried out
- The bank will send an OTP on the RMN or registered phone number
- Details of the Debit Card pertaining to its date of expiry and the last 6 digits must be entered
- The OTP generated along with the MPIN that one desires to have must be put in
- The â€œSubmitâ€ button needs to be clicked following which a â€œSuccess or Decline” message will be displayed. â€œSuccessâ€ needs to be chosen.
Everyday Bill payment Made Easy
As it has already been mentioned earlier, certain businesses will be found to be auto registered with the app. These include the entities for which bill payments need to be made quite frequently. For the purpose of Bill payment, the following steps mist be followed:
- One may log in to a UPI app of oneâ€™s choice
- The â€œBill Pay” section needs to be selected
- Following this one needs to choose the â€œBullet Categoryâ€. There are various categories such as electricity, telephone, etc.
- One must choose the bullet and click on the â€œPay Nowâ€ button.
- The system will ask for the UPI PIN after entering which the transaction will be successful.
Making a request for money receipt
The UPI system allows one to make a request for money. In order to do so the following steps need to be adhered to:
- One must opt for the â€œCollect Money” option in the UPI app
- The UPI ID of the payer must then be keyed in
- The amount can then be typed in
- Mention can also be made of the time in which one wants the payment to be made
- After entering these details â€œConfirm” option needs to be selected.
Fees and Charges
While UPI is yet to emerge as a robust alternative for cash and card payments, regular updating of its features will surely enhance its preference. In order to make it more attractive, no charges are levied on it at present. On the contrary it offers a whole range of offers and incentives to the customer.
Overall, it can be stated without a trace of a doubt that digital transactions made possible through the Unified Payments Interface are revolutionizing the concept of monetary transactions. The fact that one does not have to be dependent on the availability of ATMs for making payments is in itself a noteworthy concept. Due to its encrypted nature and the fact that it requires nothing but a mobile number to carry on transactions makes UPI one of the safest options available today. It is not only possible to transfer funds from oneâ€™s account to another through this medium but also possible to transfer funds across ones own accounts.
After all is said and done, it must however be remembered that UPI has still not emerged as the only alternative to the use of Debit and/or Credit Cards at least in India. However, given the incentives offered to use this medium coupled with the growing need for cashless alternatives, probably the dawn of a new future is not a distant dream.