All You Need To Know About UPI & Using India’s No 1 payment interface

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UPI is one of the biggest success stories to emerge from India in recent years. In fact UPI is such a tremendous success that other countries want to learn from India’s pioneering initiative and UPI is now set to expand internationally.

If you haven’t started using UPI yet, you are missing out on one of the world’s most powerful yet easiest payment systems. If you are sending funds via NEFT or IMPS, read on to make your financial transactions, bill payments, online and offline shopping far simpler.

UPI explained

A few years ago, there were cheques, demand drafts and bank transfers through bank branches. Lots of paper, and it took days for funds to get transferred between bank accounts. As the Internet became a conduit for commerce and banking, first came IMPS/NEFT, which enabled users to transfer funds between bank accounts but required the recipient’s name, contact number, bank name, bank account number, IFSC code of the branch, etc. Remembering and keying in all this information made IMPS/NEFT cumbersome to use. With more than a billion mobile connections in India, a mobile phone number was a unique identifier and easy to remember or gain access to from a phone contact list. So, the innovators behind UPI made it as simple as just requiring a mobile number or scanning a QR code to transfer money. But while the mobile number or QR code is an identifier, they are in fact connected to a unique UPI ID. While you may think you are transferring to a mobile number, the UPI ID is the true virtual payment address (VPA) behind online transactions/money transfers.

Why you need a UPI ID

To access easy-to-use UPI services that allow instant transfers and payments, every user is required to generate a UPI ID, which acts as a unique identifier for the user’s identity. The UPI ID acts as a way for banks who are processing the transaction to track the sender and recipient’s accounts.

A UPI ID is structured in an easy-to-remember format, similar to an e-mail address. It could be something as simple as abcd@bank (where, ‘abcd’ could be the user’s name, a part of his/her e-mail address, or mobile phone number, and ‘bank’ is the name/initials/shortened name of the bank providing services to the UPI app, with some prefix or suffix added in some cases).

To transfer money through a UPI payment application like Paytm, you don’t need to enter the receiver’s UPI ID. As mentioned earlier, you can simply select the receiver’s contact from your phone book or enter the receiver’s mobile number to send money via UPI. Because the mobile number is connected to a UPI ID, your bank knows exactly where to transfer the money to (bank, account number, etc.) and does so in a jiffy once you enter your secret PIN. A UPI ID is completely independent of your bank account number or any other personal detail.

Creating a UPI ID

It’s a very simple process to create a UPI ID, which will simplify your banking, bill payments, shopping and so much more.

● First, download a UPI payment application, like Paytm.

● Enter your mobile number, which is registered with your bank. You cannot use a number that is not registered with your bank.

● An SMS will be automatically sent from your mobile number to verify it with the bank.

● Next, you need to select your bank name from the list that will be presented to you. Your bank account details will now be fetched from the bank using your mobile number.

● If you are linking your bank for the first time, you will be asked to set up an UPI PIN. You will need your debit card details for this part.

● And that’s it—your bank account is linked via UPI, and you can make your first transfer, bill payment or pay for offline or online shopping—given the vast number of use cases for UPI, you will find that the facility makes your life easier in so many arenas.

Transferring funds using a UPI ID

As with all things related to UPI, this is a simple, user-friendly, yet secure process. If you want to transfer funds between your own bank accounts or to someone else, UPI is undoubtedly one of the easiest methods to do so.

● Log in to your UPI payment application, such as Paytm, and click on the ‘UPI Send Money to Anyone’ option.

● Select the receiver from your phone contact list or enter the mobile number of the receiver if the contact is not saved on your mobile device.

● If the receiver does not use the app you use, you could ask them for their UPI ID on another app and enter that.

● You could also click on the ‘Scan QR’ option and scan the recipient’s QR code.

● Next, select the bank account from which you want to make the transfer and click on ‘Proceed.’ You can connect multiple bank accounts on one application like Paytm, each with its own UPI ID.

● Enter UPI PIN associated with the selected bank account.

● And that’s it—the amount will be immediately transferred from your bank account to the receiver’s bank account.

The Bottom Line
UPI has not only created a revolution in payments in India, but in addition to being fast, it is also secure, and easy to use for anyone, across age groups. While UPI is secure in itself, there are some simple tips that users can follow to ensure that they don’t fall victim to any fraud. Enjoy the fastest way to pay with peace of mind!