A Unified Payments interface is an application that allows easy and seamless transfer of money across different bank accounts in no time. It is like outlook in banking language, say for instance in outlook all your email ids get on a single platform similarly in a UPI all your bank accounts are present in a single mobile application. It seamlessly transfers money across different Banka and merchants in a matter of seconds.

Idea of UPI 

The idea of UPI came due to the problem of multiple accounts, lack of interoperability and to avoid long queues of Banks. To provide the customers with the Hassle-free environment and easy and fast transaction of money across a safe platform is what was the idea behind UPI. 

NPCI conducted the pilot testing on 21 member banks on 11 April 2016 by Dr. Raghuram G Rajan the then RBI governor. Followed by Banks starting to launch their UPI apps on Google Play Store.

UPI Features

  • Immediate money transfer through banks
  • No Holidays and time restriction, 24×7 and 365 days of seamless transaction.
  • Single window system that means a single app having multiple bank accounts.
  • QR code 
  • Online complaint through the app itself
  • Donations, collections and other disbursements are now scalable.
  • QR pay scan and pay payment
  • Best solution to last minute ATM run, no change issues and to cash on delivery problem
  • Utility payment system
  • Over the counter payment system

Markets of UPI

  • India 
  • UAE
  • Bhutan
  • Nepal
  • Malaysia
  • Singapore

Participants in UPI 

  •         NPCI
  •         Bank account holders
  •         Merchants
  •         Beneficiary bank 
  •         Remitter bank
  •         Payer Payment service provider 
  •         Payee payment service provider

Benefits of UPI 

The benefits of UPI are diverse and varied from the participants. There are three main beneficiaries of the UPI system; these are the three core participants – Banks, Customers and Merchant. The benefits of the UPI to these are as follows:

Banks Benefits

  • Safer, secured and innovative platform than the conventional banking system wherein cases like cheque bounce etc can happen.
  • Single click system
  • Two factor authentications
  • Enable seamless transaction
  • Leveraging existing infrastructure
  • Payment basis single 
  • Universal application for transaction

Customer Benefits

  • Round the clock availability
  • Single click authentication
  • Raise complaint through online app 
  • No standing in bank lines and the best solution for last minute ATM runs.
  • Use of virtual ID which is more secure than the conventional credential sharing wherein at times the important credentials are often taken by frauds.
  • Single window that is single point accessibility to different bank accounts.

Merchants Benefits 

  • In – App Payments
  • Single click facility
  • Seamless fund collection from customers
  • Suitable for become transaction
  • No risk of storing customers’ virtual addresses.
  • Resolve the COD (cash on delivery) collection problem.

Registration in UPI Enabled Application

  • Download the app 
  • Create profile and manage bank account
  • Generating UPI -PIN

Performing UPI Transaction

PUSH – send money

In the push service money is sent. The user logs into his account and post that enters the name of the beneficiary and selects the amount to be debited. A confirmation message pops up on the screen and then on clicking on confirm and entering the PIN.A User gets a successful or failure message.it is a pay request. 

PULL – Request Money 

This operation involves pulling the money by merchant from the bank account of the payer. First User logs in to his UPI app and post UPI login the user selects the option of collecting money. The user enters payers virtual ID, amount to be credited and the user gets a confirmation screen to review the payment details. Then the payer will get a notification on his mobile for requesting money. The payer views the app and accepts or declines the request. After accepting the request, the pater enters the pin and finally the payment is successful. Pull service is a kind of collecting request.

Conclusion

Digital India is an important initiative and for that digital ecosystem like UPI plays a role. The major unwanted but crucial achievement of demonetization was the digitization of our economy. People started using these apps and now they have become a part of our life due to COVID as well. From fruit sellers to malls QR Code scan and pay is available. Hence the coming up of the UPI has somewhat been adopted at the bottom level and with efforts made at grass root level to counter digital divide and increase in digital literacy will surely contribute in increased use of the UPI system. The adoption of this system will make money transfer easier, efficient, secure and quick. It will help in faster growth of our economy and will be a crucial step in getting close to our goal of a 5 trillion economy.