Android App Development

What is UPI – How Does it Helps in a Cashless Indian Economy

After the demonetization hullabaloo last year, India is slowly inching its way to a cashless economy and UPI is a buzzword that is resonating through the air. So what is UPI or Unified Payment Interface?
UPI is a payment system that allows money transfer between any two bank accounts via smartphone. The mechanism allows a customer to pay directly from a bank account to different merchants. These merchants can either be off-line or on-line. UPI does away with the hassle of typing credit card details, IFSC codes or net banking and wallet banking passwords. UPI merges a wide variety of banking features like seamless fund routing and merchant payments under an umbrella.
It also provides ‘Peer to Peer’ collect request that can be scheduled and paid as per requirement and convenience. Each bank provides its own UPI app for Android, Windows and iOS mobile platforms. So basically, your smartphone doubles up as a virtual debit card wherein you can send, receive or transfer money instantly.
Launched in January 2016, UPI is an initiative by the National Payments Corporation of India (NPCI). This organization is set up with the support of the Reserve Bank of India and the Indian Bank’s Association. The NPCI operates the Rupay payments infrastructure that allows different banks to connect and transfer funds. Another initiative of the organization is IMPS (Immediate Payment Service). UPI is a better version of IMPS.
Getting down to business, how does a UPI work?
Normally, to make an on-line bank payment, one has to enter their account details. Their account number, type, bank name and the IFSC code. This in itself is painful processes certain value will have to be typed in twice for authentication. Imagine doing the same over a phone. Moreover, most banks take up to 12 hours to add a new payee. Thankfully. This has reduced to 4-6 hours.
UPI as mentioned before, do away with all these. The interface allows account holders across banks to send and receive money from their smartphones using just their Aadhaar’s unique identity number, mobile phone number or virtual payments address without entering bank account details.
To initiate a transaction, one can use either of their two address. Global or Local. The global address includes the mobile number, Aadhaar card number, and the bank account number. A local address, on the other hand, can be a virtual address. Something that your bank gives you. Like a virtual ID similar to your email ID. This virtual address will allow you to send and receive money from multiple banks and prepaid payment issuers. Now you will longer be required to use a particular app to send and receive money.

Instances where you can use UPI.

For example, if you use a taxi service, at the end of the journey you just have to give your virtual address and the driver will request money from it. You will get a message on your mobile phone asking for authentication. Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require either the driver or you to share bank details. Since UPI runs on IMPS, the service will be available real time and 24X7. The Transaction limit for a day is 1lakh rupees.
Companies like Ola and Uber can take advantage of UPI. Not just taxi services, but Food ordering services like Zomato, Food Panda, and Big Basket can also leverage UPIs.

How Secure is UPI?

UPI transactions take place in a highly encrypted and foolproof format. 2 factor authentication will be in place wherein MPIN will be used instead of OTP. Moreover, UPI is a layer over IMPS and the IMPS network handles more than 8000 crores worth of transaction on a single day.

Let’s get started!
  1. Download the app from Play Store
  2. Install the app properly
  3. Set app login
  4. Create virtual address
  5. Add your bank account
  6. Set M-Pin
  7. Start transacting using UPI

The UPI app of the following banks are available in Google Play Store:

  • Andhra Bank
  • Axis Bank
  • Bank of Maharashtra (BOM)
  • Bhartiya Mahila Bank (BMB)
  • Canara Bank
  • Catholic Syrian Bank (CSB)
  • DCB Bank
  • Federal Bank
  • ICICI Bank
  • TJSB Sahakari Bank
  • Oriental Bank of Commerce (OBC)
  • Karnataka Bank
  • UCO Bank
  • Union Bank of India
  • United Bank of India
  • Punjab National Bank (PNB)
  • South Indian Bank (SIB)
  • Vijaya Bank
  • YES Bank
Services offered by UPI
  • Balance Enquiry
  • Transaction History
  • Send / Pay Money
  • Virtual Address
  • A/c no. & IFSC code
  • Mobile no. and MMID
  • Aadhaar
  • Collect Money
  • Virtual Address
  • Add bank account
  • Change / Set MPIN
  • Notifications
  • A/c Management