The UPI Full Form in English is Unified Payments Interface (UPI) is a system that integrates multiple bank accounts into a single mobile application offered by any participating bank. It combines various banking features, including seamless fund transfers and merchant payments, into one platform. Additionally, UPI supports “Peer to Peer” collect requests, which can be scheduled and paid according to the user’s preference and convenience.
In this context, NPCI initiated a pilot launch with 21 member banks on April 11, 2016, led by Dr. Raghuram G Rajan, Governor of the RBI, in Mumbai. Following the pilot, banks began uploading their UPI-enabled apps to the Google Play Store starting from August 25, 2016.
What is UPI Full Form?
The UPI Full Form in English is Unified Payments Interface (UPI) is an instant payment system in India that facilitates seamless and free money transfers between bank accounts through mobile devices.
With UPI, users can transfer money using a unique UPI ID or Virtual Payment Address (VPA). They can also send money by selecting the recipient from their contact list or entering the recipient’s contact number.
UPI simplifies the process of transferring funds between individuals and businesses. It enables users to make online purchases, pay utility bills, and shop at physical stores using QR codes, VPAs, or UPI-registered mobile numbers.
Concept Behind UPI
The concept of UPI was developed to address issues related to managing multiple bank accounts, lack of interoperability between systems, and long queues at banks. The goal was to create a seamless, secure platform that offers customers a hassle-free environment and facilitates easy, fast transactions.
On April 11, 2016, the National Payments Corporation of India (NPCI) conducted pilot testing with 21 member banks, overseen by Dr. Raghuram G. Rajan, the then RBI Governor. Following this, banks began launching their UPI apps on the Google Play Store.
Understanding UPI: A Closer Look
Unified Payments Interface (UPI) offers a convenient and secure method for making payments, removing the need for traditional methods like cash or cards.
To use UPI, you need two key components: a UPI ID and a UPI PIN.
UPI ID:
This is a unique virtual payment address created during registration. It functions similarly to an email address but is composed of numbers or letters. For instance, your UPI ID might be johnsmith@upi or 1234567890@upi. On Paytm, it would appear as 1234567890@paytm.
UPI PIN:
This is a four or six-digit numeric password set up during registration. It serves as a secure key to authorize transactions. Just like an ATM PIN, you must enter your UPI PIN to authenticate and complete a UPI transaction.
UPI enables you to send money to friends and family or pay for goods and services directly from your bank account. It simplifies payments and allows transactions anytime, anywhere, without the need for cash or physical cards.
Features of UPI
Instant Transfers:
UPI facilitates real-time money transfers between bank accounts, ensuring quick and seamless transactions.
24/7 Availability:
Transactions can be made at any time, even outside of traditional banking hours.
Unified Platform:
UPI consolidates multiple bank accounts from different banks into a single app, such as Paytm.
Secure Transactions:
Users create a unique UPI ID to receive payments without sharing bank account details for each transaction.
Versatile Transactions:
UPI supports a range of activities including person-to-person transfers, merchant payments, bill payments, and cash-on-delivery transactions.
Scan and Pay:
The “Scan and Pay” feature allows users to make instant payments by scanning QR codes, eliminating the need for cash or cards.
Transaction History:
UPI provides a detailed transaction history and real-time notifications to keep users informed of their payment activities.
Utility Bill Payments:
Users can conveniently pay utility bills, such as electricity, water, and gas, directly from their bank accounts with just a few taps.
Is UPI Available in the U.S.?
Yes, UPI is available in the U.S. You can send money to India using UPI by using the receiver’s UPI ID. Several banking apps, such as Wise, World Remit, and Remitly, support UPI transactions from the U.S.
Which UPI Systems Can You Use in India?
In India, you can use various banking and payment apps that support UPI, including PhonePe, Google Pay, Axis Pay, and BHIM.
Is UPI Safe in India?
Yes, UPI is safe in India. It is regulated by the Reserve Bank of India, ensuring a high level of security and oversight.
Benefits of UPI for Merchants
Enhanced Customer Convenience:
UPI allows customers to pay directly from their bank accounts, eliminating the need for cash or card transactions. This streamlines the payment process and enhances the overall customer experience.
Faster Settlements:
With real-time fund transfers, UPI enables merchants to receive payments instantly. This improves cash flow and reduces the waiting time for settlements.
Cost-Effective:
UPI transactions generally incur lower fees compared to traditional payment methods like credit cards. This can lead to significant savings on transaction costs, especially for businesses with high transaction volumes.
Broad Customer Reach:
UPI is supported by numerous banks and payment service providers, making it accessible to a wide customer base. Merchants can attract customers from various banks and expand their market reach.
Improved Business Insights:
UPI provides detailed transaction data, allowing merchants to analyze customer behavior, track sales patterns, and make informed business decisions. This data-driven approach can help optimize operations and enhance customer engagement.
Supports Digital Economy:
By accepting UPI payments, merchants contribute to the government’s push towards a cashless economy and support digital transformation initiatives.
Perform UPI Transactions:
-
Push Service (Send Money):
- Log in to your account.
- Enter the beneficiary’s details and the amount to be debited.
- Review the confirmation message on the screen.
- Click “Confirm” and enter your UPI PIN.
- Receive a notification confirming whether the transaction was successful or failed.
-
Pull Service (Request Money):
- Log in to your UPI app.
- Select the option to collect money.
- Enter the payer’s virtual ID and the amount to be credited.
- Review payment details on the confirmation screen.
- The payer receives a notification on their mobile.
- The payer views the request, accepts or declines it, and enters their PIN to complete the payment.
- Once accepted, the payment is processed successfully.
Benefits of UPI for Customers
Easy and Convenient:
UPI offers a simple and user-friendly interface for making payments. Customers can easily transfer funds using their smartphones, avoiding the need for cash or card transactions.
Instant and Real-Time Payments:
UPI ensures immediate fund transfers between bank accounts, allowing customers to make payments and receive confirmations instantly.
Secure Transactions:
UPI transactions are protected by multi-factor authentication and encryption, ensuring the safety of customers’ financial information and reducing the risk of fraud.
Access to Multiple Bank Accounts:
Customers can link and manage multiple bank accounts within a single mobile app, providing flexibility and ease in managing finances.
Wide Acceptance:
UPI is accepted by numerous merchants, both online and offline. Customers can use UPI for payments at various locations, including retail stores, e-commerce platforms, and utility bill payments.
No Need for Cash or Cards:
UPI allows customers to make payments directly from their bank accounts, eliminating the need to carry cash or cards. This reduces the risk of loss or theft and enhances convenience.
Transaction History and Notifications:
UPI provides a transaction history and real-time notifications for successful transactions, helping customers track expenses and stay updated on payment activities.
What Are the Security Measures Taken by UPI?
UPI ensures secure transactions through:
Two-Factor Authentication:
Requires entering a UPI PIN along with the bank’s registered mobile number.
Fraud Detection:
Monitors transactions for suspicious activities and alerts users if any are detected.
Transaction Time Limits: Limits the time for completing transactions to reduce fraud risk.
Encryption:
Protects transaction data, making it difficult for unauthorized parties to access information.
These security measures make UPI a reliable and secure platform for digital payments. UPI is revolutionizing digital payments in India by offering a fast, secure, and efficient way to handle transactions. For more details, download the Testbook App.
Participants in UPI Transactions
Payer PSP (Payment Service Provider):
The Payment Service Provider that delivers UPI-enabled payment services to the payer (the individual or business initiating the payment).
Payee PSP:
The Payment Service Provider that offers UPI-enabled payment services to the payee (the recipient of the funds).
Remitter Bank:
The bank where the payer holds their account and initiates the UPI transaction.
Beneficiary Bank:
The bank where the payee holds their account and receives the funds from the UPI transaction.
NPCI (National Payments Corporation of India):
The organization responsible for operating and managing the UPI infrastructure. NPCI ensures interoperability and facilitates smooth processing of UPI transactions.
Bank Account Holders:
Individuals or businesses who hold bank accounts and use UPI-enabled services to send or receive funds.
Merchants:
Businesses or individuals who accept UPI payments for goods or services provided to customers.
UPI Transaction Limits
Regular Transactions:
The standard limit for UPI transactions is set at Rs 1 lakh per transaction.
Special Categories:
For specific categories such as Capital Markets, Collections, Insurance, and Foreign Inward Remittances, the transaction limit is raised to Rs 2 lakh per transaction.
IPO and Retail Direct Scheme:
For transactions related to Initial Public Offerings (IPOs) and the Retail Direct Scheme, the limit is further increased to Rs 5 lakh per transaction.
What Are UPI Transaction Charges?
UPI transactions are generally free of charge for customers, meaning there are no fees for sending or receiving money through UPI. However, some banks or payment service providers might impose fees for certain types of transactions or additional services. For example, Paytm, a popular payment app supporting UPI, does not charge any fees for UPI transactions conducted through its platform. It’s worth noting that Paytm has a daily transaction limit of Rs. 1 lakh for UPI transactions.
For accurate and up-to-date information regarding any potential fees or charges, it’s advisable to check with your bank or payment service provider.
What is a UPI PIN?
A UPI PIN is a unique 4 or 6-digit code created by users during the registration process on a UPI application. This PIN is essential for securing and authenticating transactions. To prevent fraud, it’s important to keep your UPI PIN confidential and not share it with anyone.
How to Generate a UPI PIN
Here’s how to generate a UPI PIN on Paytm:
Open the Paytm App:
Launch the Paytm app on your mobile phone.
Access Profile:
Tap on the ‘Profile’ icon located in the top left corner of the app.
Navigate to UPI Settings:
Scroll down in the left sidebar and select ‘UPI & Payment Settings’. You’ll see a list of your linked bank accounts.
Set UPI PIN:
If a UPI PIN is not already set for a bank account, you’ll see a ‘Set PIN’ option under that account. Click on ‘Set PIN’.
Enter Card Details:
Input the last 6 digits of your card number along with its expiry date.
Verify with OTP:
You’ll receive an OTP (One-Time Password) on your registered mobile number. Enter the OTP on the screen.
Choose Your PIN:
Select a UPI PIN of your choice and enter it on the screen. Ensure it is secure and confidential.
Submit:
Click on ‘Submit’ to finalize and set your UPI PIN.
Once you’ve completed these steps, your UPI PIN will be set for the selected bank account. You’ll need this PIN to authorize and authenticate all UPI transactions from that account.
Why is a UPI ID Required?
A UPI ID, or Unified Payments Interface ID, is a unique virtual payment address that users create to facilitate transactions via the UPI system. It acts as an identifier that connects your bank account to the UPI platform. Much like an email address, a UPI ID consists of a combination of numbers, letters, or special characters, followed by the “@” symbol and the name of the UPI service provider. This ID allows you to receive funds and make payments without having to share sensitive bank account details.
How to Find Your UPI ID
Open the Paytm App:
Launch the Paytm app on your phone.
Access Profile:
Tap on the profile picture located in the upper left corner of the main screen.
View UPI ID:
Your UPI ID and QR code for receiving payments will be displayed below your profile picture.
Share Your UPI ID:
Copy and share your UPI ID with the sender to receive money easily.
How UPI Payments Work
Register:
Begin by registering your bank account with a UPI-enabled app.
Send Money:
To make a payment, enter the recipient’s UPI ID or scan their QR code within the app.
Authenticate:
Authenticate the transaction using your UPI PIN or biometric authentication.
Process:
After authentication, your bank communicates with the recipient’s bank via the UPI platform to process the transaction.
Transfer:
Funds are transferred in real time from your bank account to the recipient’s bank account.
Confirmation:
Both you and the recipient receive instant notifications confirming the successful transaction.
Settlement:
Final settlement of the funds occurs between the banks involved.
UPI payments offer a simple and secure method to transfer money instantly between bank accounts using a UPI app.
How to Make a UPI Transaction
Open the Paytm App:
Launch the Paytm app on your smartphone.
Select Payment Option:
Choose “Scan and Pay” or use the QR code scanner feature on the main screen.
Enter Recipient Details:
Enter the mobile number or name of the receiver. You can either select a contact from your phone book or manually input the number.
Enter Payment Amount:
On the next screen, click on “Pay” and enter the amount you wish to send.
Choose Payment Mode:
Select your preferred payment mode and proceed. Optionally, add a remark or description to specify the transaction’s purpose.
Complete Transaction:
Click “Pay” to finalize the transaction and send money to the receiver.
How to Create a UPI Account on Paytm
- Download the App: Install the Paytm UPI mobile payment application from the app store.
- Enter Mobile Number: Input your mobile number. If you have a dual SIM phone, select the SIM slot that matches your number.
- Verify Number: Confirm your mobile number by sending an SMS from your phone.
- Select Your Bank: Choose your bank from the list, ensuring it matches the number registered with your bank. Your account details will be fetched automatically.
- Set Up UPI PIN: If this is your first time linking the bank, you will need to set up a UPI PIN using your debit card details.
- Link Complete: Your bank account is now linked via UPI, and you can start making payments.
How to Use Paytm UPI
- Open the App: Launch the Paytm UPI app on your device.
- Choose Payment Option: On the home screen, select from options like ‘Scan & Pay’, ‘To Mobile or Contact’, or ‘To Bank or Self A/c’.
- For ‘Scan & Pay’:
- Enter the recipient’s mobile number or name.
- Enter the amount to send and select your preferred bank account.
- Authenticate with your UPI PIN to complete the payment.
- For ‘To Bank or Self A/c’:
- Enter the bank account details, mobile UPI number, or UPI ID.
- Follow the same steps as for the ‘Scan & Pay’ option.
- Remember: Keep your UPI PIN confidential and be cautious with your personal and financial information to ensure a secure transaction experience.
How to Check UPI Transaction Status on Paytm
- Log In: Open the Paytm app on your mobile device.
- Navigate to UPI Section: On the home screen, find the ‘UPI Money Transfer’ section and tap on ‘Balance & History’.
- View Linked Accounts: The next screen will show all bank accounts linked to your Paytm app.
- Check Transaction History: Scroll down to view your transaction history.
- View Details: Tap on a specific transaction to see its status, including transaction time, amount, and transaction ID.
- Share Details: If needed, share transaction details by tapping the ‘Share’ option at the top right corner.
Browse Previous Transactions: Continue scrolling to review older transactions.
What is the Difference Between BHIM and UPI?
| BHIM | UPI |
|---|---|
| Mobile app developed by NPCI | Payment infrastructure/platform |
| Standalone app with its own user interface | Common platform for multiple apps and systems |
| Available as a separate app for download | Integrated into various apps and systems |
| Simplified user experience with features like fund transfers and QR code scanning | Offers similar features but with variations depending on the integrating app |
| Specific brand associated with NPCI | Broader framework that can be adopted and used under different branding |
| Users select their bank during setup | Users can link any UPI-enabled bank account to the app of their choice |
Tips for Using UPI Safely
To ensure the secure use of UPI, follow these essential tips:
Secure Your UPI App:
Use a strong and unique PIN or password for your UPI app. Also, protect your smartphone with a lock screen passcode or biometric authentication.
Download Official Apps:
Only download UPI apps from trusted sources like official app stores to avoid malicious or fake apps that could compromise your security.
Protect Your UPI Credentials:
Never share your UPI PIN, UPI ID, or any other sensitive information. Keep these details confidential and avoid storing them in easily accessible places.
Verify Transaction Details:
Before making any UPI transaction, double-check the recipient’s UPI ID, mobile number, or QR code for accuracy. Be cautious when sending money to unknown or suspicious entities.
Use Secure Networks:
Avoid using public or unsecured Wi-Fi networks for UPI transactions. Opt for a secure and trusted internet connection to reduce the risk of interception or unauthorized access.
Enable Transaction Notifications:
Activate transaction notifications through your UPI or banking app to receive real-time alerts about any activity on your account. This helps you quickly detect and address unauthorized transactions.
Regularly Update Your App:
Keep your UPI app and smartphone operating system updated with the latest security patches and updates to protect against known vulnerabilities and ensure you have the latest security features.
Be Wary of Phishing Attempts:
Be cautious of unsolicited calls, messages, or emails requesting your UPI credentials or personal information. Avoid clicking on suspicious links or sharing sensitive information with unknown sources.
Report Suspicious Activity:
If you spot any unauthorized transactions or suspicious activity on your UPI account, promptly report it to your bank or UPI service provider. They can help secure your account and investigate the issue.
No UPI PIN Required for Receiving Money:
Remember, you don’t need to enter your UPI PIN to receive money. The PIN is only required for initiating transactions, so never share it with anyone.
Delete Card Information After Purchase:
After making an online purchase, delete your card information from the merchant’s website or app to reduce the risk of unauthorized access.
Be Cautious with SMS and Calls:
Avoid responding to SMS messages with unverified links or calls from unknown sources. Scammers may attempt to trick you into revealing sensitive details like your CVV, OTP, or UPI PIN. Always verify the legitimacy of communications before sharing any personal or financial information.
Beware of Social Media Requests:
Be cautious of social media profiles requesting your contact details or financial information related to UPI. Use only official and verified platforms for UPI-related interactions.
Frequently Asked Questions
What is the UPI Full Form?
The UPI Full Form in English is Unified Payments Interface. It is a digital payment system developed by the National Payments Corporation of India (NPCI) that allows users to make instant and secure transactions between bank accounts using their mobile devices.
How does UPI work?
UPI operates by linking multiple bank accounts to a single mobile application. Users can perform transactions by entering the recipient’s UPI ID, scanning QR codes, or using their phone number. UPI supports real-time transfers, bill payments, and merchant transactions.
What is a UPI ID, and why is it important?
A UPI ID, or Unified Payments Interface ID, is a unique virtual address assigned to each user for conducting transactions. It is essential for making payments as it acts as an identifier linked to the user’s bank account, allowing them to send and receive money without sharing sensitive bank details.
Are there any charges for UPI transactions?
Generally, UPI transactions are free for users, with no charges levied on sending or receiving money. However, some banks or payment service providers may impose fees for certain types of transactions or additional services, so it’s advisable to check with your bank for specific details.
Is UPI secure for transactions?
Yes, UPI is designed with multiple layers of security to protect transactions. It uses two-factor authentication, including a UPI PIN, and encrypts transaction data to prevent unauthorized access. Users should still practice caution by protecting their PIN and personal information to enhance security.
conclusion
The UPI Full Form in English is Unified Payments Interface (UPI) has revolutionized digital payments by offering a simple, secure, and efficient way to handle transactions. With its ability to link multiple bank accounts to a single mobile application, UPI provides a seamless experience for users, enabling instant transfers, bill payments, and merchant transactions. The system’s reliance on a unique UPI ID ensures user privacy and reduces the need to share sensitive bank details.
Despite its generally fee-free nature, users should remain aware of any potential charges from specific banks or service providers. UPI’s security measures, including two-factor authentication and encryption, contribute to a safe transaction environment, though vigilance is always advised.
