What is UPI ?
The full form of UPI is Unified Payment Interface. UPI is one of the multiple options available for customers to do fund transfer through the online mode (i.e. money transfer to anyone and anywhere within India). This facility is managed by NPCI (National Payment Cooperation of India). It is the apex body which manages payment transactions in India .
To know about the basics of online banking , refer to our article on funds transfer: https://www.storyyogi.com/online-banking-1-fund-transfer/.
Why should we use the facility of UPI ?
It’s very simple ! Money transfer through UPI is very swift and secure. Swift because you can instantly transfer money from your account to the other account for e.g to the account of your friend or cousin . It is also useful to make payments online i.e. through electronic mode and avoid paying physical cash for purchase of any goods.
For e.g. You want to buy a new toy online from Amazon and the cost of toy is INR 1500. You can buy this toy by making payment via UPI option in payment section. Your bank account linked to UPI ID will be debited and the payment will be made to Amazon Account (linking of account to UPI ID is explained in point no.3). Isn’t it simple?
How does the payment facility operate ?
You need to have a bank account and the bank should offer the UPI facility. On registering for UPI facility with your bank , you are provided with a Unique ID . e.g. xxx@bankname, with this ID you can start sending and receiving money from and to your bank account. As a next step you can also link this UPI id with Amazon/ Paytm wallet. Once you link the UPI id, you can use Amazon or Paytm wallet to make payment for your online purchases and the amount will be deducted from your bank account.
What are the benefits of UPI Transactions ?
- Speed: Yes! It is super-fast. Once you initiate a UPI transaction it conducts multiple validation with NPCI, Merchant( i.e. Amazon in our example ) and your bank to see if all the transaction details are valid. This happens in a jiffy ! Post validation the amount is transferred immediately to the receiving party.
- Secure: It is very safe and convenient.
- Most efficient payment mode: Our government of India is emphasising on Cashless economy; the usage of UPI transfer will certainly lead to safe transactions and lead to Cashless economy.
- Free of cost: It is free as of now i.e. no charges will be levied if fund transfer is done through UPI.