National Payments Corporation of India (NPCI) has launched a new payment solution which actually is a much improved way, in terms of ease of use, over the previous one, IMPS (Immediate Payment Service). This new solution, unified payments interface (UPI), allows customers to use virtual payment addresses, like myname@abcbank, as payment identifier for sending and collecting money. This UPI works on a single click, two-factor authentication. Two factors that work in favour of UPI are: 1) an option to push or pull financial transaction on schedule; and 2) linking it with only a bank account. The linking of UPI to a bank account, without revealing account details, should eliminate security concerns, largely.
How It Works
First, as a user, you need to register with your payment service-provider (PSP) and create a virtual payment address (VPA), before sending or receiving funds using UPI and link it to your account. Also, remember, this UPI can be linked only with a bank account and not to a wallet. Money can be transferred either by using VPA or the bank account number and Indian Financial System Code (IFSC). For transactions using VPA, the fund receiver also needs to have a VPA or account number and IFSC.
The various channels for transferring funds using UPI are:
1. Transfer through virtual ID;
2. Account number + IFSC;
3. Collect / Pull money based on virtual ID (VPA).
UPI also provides an option for scheduling push & pull transactions for various purposes like sharing bills among peers. One can use the UPI app instead of paying cash on delivery on receipt of product from online shopping websites. It can also be used for miscellaneous expenses, like paying utility bills, over-the-counter payments, barcode (scan and pay)-based payments, donations, school fees and other such cases.
The interface is an advanced version of Immediate Payment Service (IMPS), which is a 24X7 funds transfer service. UPI allows a customer to have multiple virtual addresses for multiple accounts in various banks.
To ensure privacy of customer’s data, there is no account number mapper anywhere other than with the customer’s own bank. This allows the customer to freely share the financial address with others. A customer can also decide to use the mobile number as the name instead of the short name for the virtual address like [email protected]
The VPA acts as a financial address without having to reveal the bank account number and IFSC code. Once registered for VPA, users can send and receive payments instantly from any bank account using their mobile phone in a safe and secure way. They will also be able to make payments to merchants from their mobile phones where UPI is accepted as a payment mode.
How Much Money Can Be Transferred?
Users can make payments with UPI 24x7 on all days, including bank holidays, up to a maximum of Rs1 lakh. At present, 21 banks are on board with NPCI for the UPI application. In addition, this app is available only on Android-based mobile phones.
Here are the names of banks and their official app (available on Google Play):
Federal Bank (Lotza), Bank of Maharashtra (Maha UPI), TJSB Bank (TRANZAPP-UPI), Karnataka Bank (KBL SMARTZ (UPI)), DCB Bank (DCB Bank UPI App), Union Bank of India (Union Bank UPI App), Vijaya Bank (VIJAYA UPI), United Bank of India (UNITED UPI), Punjab National Bank (PNB UPI), Axis Bank (Axis Pay), South Indian Bank (SIB M-Pay (UPI Pay)), Catholic Syrian Bank (CSB-UPI), ICICI Bank (Pockets), Andhra Bank (Andhra ONE), UCO Bank (UCO-UPI), YES Bank and Canara Bank (Empower).