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The full form of UPI is the Unified Payments Interface. It was launched in 2016 by the NPCI, or National Payments Corporation of India. The NPCI set out to build a payment system that was an improvement on the existing IMPS system. While the IMPS, NEFT, and RTGS, each had their own limits , they were useful when transferring large amounts of money securely. In this article, we’ll cover UPI and ways in which you can use it.
The UPI system is smartphone-based and requires you to use a UPI app (like PhonePe, Google Pay, or Fi), where the phone number being used on that device needs to be linked to your bank account. The UPI system merges several steps used in the IMPS system, including authentication and security-related checks, into a single step where you punch in your UPI PIN. It’s arguably among the most advanced payment systems in the world, given its level of accessibility and simplicity.
The most common use of the UPI system is of course to send money. In the world of payments, there are 2 kinds - P2P and P2M - Peer-to-peer and peer-to-merchant, where the former is you sending money to a person, and the latter is when you send money to a business.
To be able to do this, you first need a UPI ID, which is created for you by the UPI app, like GPay, PhonePe or Fi.
You can also use the UPI app to check the amount of money available in your account. Most apps have the option tucked away somewhere, but should be easy to find. The UPI app fetches your latest account balance and stores that information for a few hours only. To get this information in the first place, you’ll need to enter your UPI PIN.
You can also use your UPI app to make recurring payments through standing instructions given by you. Not sure what that means? Think subscription payments for your OTT accounts like Netflix, mobile bill payments and so on.
Remember the IPOs of 2021 - Nykaa, PayTM, etc.? UPI apps like Google Pay and PhonePe also let you subscribe to an upcoming IPO.
There are a whole lot of other uses for the UPI system too, and this is a wealth of ever-growing utility for the people of India.
In a groundbreaking move , the regulatory authority made waves on September 4, 2023, by expanding the horizons of the UPI system. This development permits the utilization of pre-sanctioned credit lines from Scheduled Commercial Banks as funding accounts for UPI transactions. What this means for users is a significant enhancement in convenience and flexibility.
Now, individuals can harness the power of the UPI system to make payments using a pre-approved credit line from a Scheduled Commercial Bank, granted they have given their prior consent. This transformation is set to revolutionize the way we conduct digital transactions, offering greater financial freedom and ease of use for all UPI users.
UPI is a highly secure and simple way to make instant payments digitally. In fact, in many parts of India today, you can leave home without even your wallet as long as you have a smartphone. You can create a UPI ID and savings account for yourself in a matter of minutes on the Fi Money app.
The one main advantage of UPI payments is that it is made in real-time. You can transfer money to a bank, or phone number in a matter of seconds, and without adding the recipient as beneficiary.
You can easily set up UPI payments by downloading an app which enables the UPI process, like BHIM, PayTM, PhonePe or Google Pay. Then, all you have to do is connect your bank account to your app and create a UPI ID for use.
You can use UPI on your phone through an app which enables the UPI payment system. You will have to download an app like the app of your bank (if it enables UPI payment) or apps like PhonePe, Google Pay, Fi, or PayTM, for instance.
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