UPI

What is UPI?

UPI or Unified Payments Interface is a live payment system developed by the National Payments Corporation of India (NPCI). UPI facilitates money transfer from bank to bank using a mobile phone through account numbers and IFSC codes.

Purpose of UPI

UPI was developed to:

• Facilitate all daily payments like bills, shopping, and rent in a simpler way
• Facilitate instant and secure peer-to-peer transactions
• Facilitate cashless digital payments in India

**How UPI Works?

• Users link their bank account to a UPI-enabled app (e.g., Google Pay, PhonePe, Paytm, BHIM).
• No requirement to fill in bank details; users send or receive money via a UPI ID (e.g., yourname@bank).
• Instant and 24x7 transactions, including Sundays and holidays.

**Key Features of UPI

• Instant fund transfer
• Single mobile app, multiple bank accounts
• Supports QR code payments
• Two-factor authentication for high security
• Multi-language support in Indian languages

Impact of UPI on India's Payment System

• Distributed digital payments to crores
• Promoted enhanced financial inclusion, even rural India
• Reduced use of cash
• Accepted for various payments—from street stalls to online
• Facilitated quicker transactions

Benefits

• Instant and zero-cost
• Easy to use
• Very secure with RBI monitoring
• Cross-bank and cross-app compatible

Limitations

• Requires internet and smartphone connectivity
• Occasional failure of transaction due to bank/server issues