The Unified Payments Interface (UPI) is a real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank transactions by instantly transferring funds between two bank accounts on a mobile platform. UPI is built over the Immediate Payment Service (IMPS) infrastructure and allows users to instantly transfer money between any two parties’ bank accounts.
Here are the key features and characteristics of UPI:
- Single Mobile Application for Accessing Different Bank Accounts: With UPI, users can link multiple bank accounts in a single mobile application, making it easy to manage and transfer money across various accounts.
- Virtual Payment Address (VPA): UPI introduces the concept of a VPA, which is a unique identifier that a user can set for their bank account, similar to an email ID. This means users don’t need to remember or share their bank account number or IFSC code; they can just share their VPA.
- 24/7 Service: UPI is available round the clock, allowing users to make transactions anytime.
- Immediate Transfer: Using UPI, money transfer happens in real-time.
- Peer-to-Peer Collection Request: UPI allows users to send a “collect” request, essentially asking another user for money. The user at the receiving end can approve or decline the request.
- Single Click 2-Factor Authentication: UPI provides a secure two-factor authentication process.
- Integration with Other Systems: UPI can be integrated with various merchant services, enabling users to make payments directly from their bank accounts to merchants.
- Interoperability: Since UPI is a unified interface, it ensures that users of one bank’s mobile application can transact with users of another bank’s mobile application.
- Low Cost: UPI transactions are typically less expensive than traditional online bank transfers.
- Versatility: UPI can be used for various financial transactions, including paying bills, mobile recharge, and even for making in-store payments.
UPI has transformed digital payments in India, making it easier and more seamless for users to transact online and bridging the gap between different bank systems. Many third-party applications like Google Pay, PhonePe, Paytm, and others have integrated UPI, driving its widespread adoption.
unified payments interface
