UPI – Unified Payment Interface: Cashless and Cardless India



UPI – Unified Payment Interface:

Indian Government moved one step towards the cashless economy with the launch of Unified Payment Interface (UPI). We can able to send or receive instant money through this new payment method and our smartphone will soon be doubled as a virtual debit card. It can help us to get rid of our wallet completely with Bharat QR code.

Switch to unified payment interface, cashless payment

With the launch of the Unified Payment Interface (UPI) in India has taken a Step towards the cashless economy. After the demonetization, the UPI has become an important platform for digital payments.  According to the figures released by NPCI – UPI Money Transactions crossed 100 million points within two years till May 1, 2018.

At present, most electronic payments in India are done through NEFT and RTGS platform and IMPS.

Difference between RTGS and NEFT

Unified Payment Interface (UPI) is an instant payment system to transfer fund between bank accounts of two parties. It is similar to NEFT or RTGS transfer. By using this mobile phone app, people also facilitate transactions from any bank account to another transaction.
This interface has been developed by NPCI, which is a coordinating body for all retail payments in the country.

Reserve Bank of India governor Raghu Ram Rajan launched the UPI on April 11, 2016

The main objective of the development of UPI is the following:

  1. The boost digital money transfer
  2. To make money transfer easy, quick and hassle-free.

The new payment interface facilitates the next generation online immediate payments, taking the advantages of various trends like increased smartphones adoption, increase penetration of mobile data and available Indian language interface.

What is the full form of UPI?

Its full form is Unified Payment Interface (UPI).

What is UPI?

The Unified Payment Interface (UPI) can be considered as an email id for our money. It is a unique identifier that our bank uses to transfer fund and make payments using immediate payment service (IMPS). IMPS is faster than NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement), and unlike NEFT (National Electronic Funds Transfer), we can immediately transfer money 24 × 7. It means that online payment will be very easy without requiring a digital wallet or debit or credit card.

Who is behind the UPI?

Unified Payment Interface (UPI) is started by NPCI (National Payment Corporation of India). It is stared with the support of the RBI (Reserve Bank of India) and the IBA (Indian Bank Association). NCPI operates payment of infrastructures – such as Visa Card, Rupay Card and MasterCard – it also allows to fund transfer from one bank account to another account. Immediate Payment Service (IMPS) is also started by the NCPI. The UPI (Unified Payment Interface) is an advanced version of IMPS.

How does the UPI work?

Recently, if we want to pay online then we need to know about IMPS(immediate payment service), NEFT (National Electronic Funds Transfer) and RTGS (Real-time gross settlement) and we have to enter our account number, account type, bank branch name, and IFSC code. Even if we have all these details but typing on a particular phone is a painful process. Most banks take up to 12 hours to add a new payer and Nowadays we need to understand the value of time and the people doesn’t want to wait anymore. UPI is one of the quick transfer processes.

The idea of the UPI is to eliminate it all previous online transfer fund system. The interface will allow bank holders to send and receive money from their smartphones using only their original Aadhar unique identification number, Mobile phone number or virtual payment address without entering bank account details.

According to NPCI (National Payment Corporation of India), There are only 29 banks agree to start this service. If our bank is UPI-enabled, we can ask to connect to the system. To begin the transaction, we can use two types of addresses-global or local. The global address includes our mobile, Aadhar Card number and bank account number. A local address can be a virtual address. Let’s say your bank gives you a virtual ID like your email ID (for example, ……..@domain.com). This virtual address will allow us to send and receive fund from interconnected banks and prepaid payment issuers.

Therefore, we will no longer need to use any special app to send and receive the fund. For example, if we use a taxi service we just have to give our virtual address and the driver will ask for it at the end of the trip. we will get a message for authentication on our mobile phone. Once we have entered your password and verified the transaction, it will be completed.

In this process, the driver or we don’t need to share bank details. Since the UPI (Unified Payment Interface) runs on IMPS (immediate payment service), the service will be available in real time and 24X7.

Nandan Nilekani is a man who is involved in the initiation of Aadhar Card and Now, He is working as an NPCI (National Payment Corporation of India) advisor. “The UPI is a layer which we have kept on IMPS (Immediate Payment Service). This Immediate Payment Service (IMPS) did not really have an easy debit capability and it has been addressed by this form. We should believe that with the invention of the UPI, this will be an important merchant platform. Money/Fund can be transferred to any other bank using a mobile phone after it is adopted by the all banks in India.

What can we do with UPI?

The UPI (Unified Payment Interface) will simplify our online money transfer system. Now, we need to use Mobikvik, Phone-Pay, TEZ (Google Pay) or Petitus like NEFT (National Electronic Funds Transfer), RTGS (Real-time gross settlement), IMPS (immediate payment service) or Digital Wallet to make quick payments to service providers. We just have to enter our details with the UPI (Unified Payment Interface), and we need to get a billing request on our phone – which we can either accept or reject immediately.

Big groceries such as taxi aggregators, Zomato, Big Basket and online grocery stores like Gofers, Food Panda, Uber, and Ola will be able to take advantage of the UPI (Unified Payment Interface) system. These companies have to register their identifier on the UPI (Unified Payment Interface) through NPCI (National Payments Corporation of India) system then we can transfer fund from a customer’s bank account through the UPI (Unified Payment Interface). nowadays, most technology companies are providing mobile wallet services through UPI (Unified Payment Interface).

In spite of this, we can transfer the fund to our family and friends immediately.

What will happen to our mobile wallet?

It is a very difficult question by most industry since the launch of the UPI (Unified Payment Interface) by NPCI (National Payments Corporation of India). Mobile Wallet companies were worried and there is a reason for this. RBI (Reserve bank of India) has only allowed banks to become a part of the payment service provider through UPI, who keep the mobile wallet out of service. Therefore, UPI has come as a boon for those banks who are losing land for Mobile Wallet like PhonePay, PayZapp, PayTM, Freecharges, Mobikivik, Oxygen, and Citrus Pay. Although the mobile wallet is asking the banking regulator to join service providers.

In my point of view, the popular mobile wallet such as Paytm has a good customer base, it can also be used for quick recharge and movie tickets. Cashback offers can keep them on stage for a while..

See some reactions from Majoj Wallet companies:

The UPI (Unified payment interface) is better than other payment services for us. Paytm already has millions of users are paying their bills using Wallet, “says Founder and CEO Paytm Vijay Shekhar Sharma. Convenience, security, and speed that we provide to users keep them back on stage. we hope that we will unlock a new channel for the development after the universe and the reach will increase in place of the UPI (Unified payment interface).

COO of FreeCharge, Govind Rajan said, “we do not want people to keep customer’s money in the wallet, we want them to use us as processors. This will be due to security and speed which we can provide, therefore there are better options for people. We are not competing with other pockets or digital systems – now, the challenge is to take cash.

The Chairman of Payment Council of India and MD, Naveen Surya said that we are very eager and thrilled with the frictionless payment infrastructure with the launch of UPI (Unified Payment Interface) and the possibility of imagining simplified. All our non-bank members are awaiting instructions for getting ready access from RBI (Reserve bank of India) and NPCI (National Payments Corporation of India). In this case of IMPS (immediate payment service) transactions, we can definitely provide high digital payment growth.

One thing is certain unless these Wallet companies come in an innovative way to stay relevant, then it will be a turmoil to survive for them.

Do you know about Payment Gateways?

We have many other payment gateways in India like CCAvenue, EBS(E-Billing Solutions), Instamozo. The question is very doubtful “What will happen with the payment gateway after UPI comes to power?”

The work of these payment gateways is to collect various payment through credit card, debit card, mobile wallet, and net banking. Therefore, the UPI (Unified payment interface) can become a new net-banking, by changing it as a payment mode.

These payment gateways provide detailed information on payment received (who paid & for what) despite providing transaction management, reconciliation, insight and so on. They also provided optimization on each level (payment options, payment page, etc.), which is beyond the simple push-n-pull method of money through the UPI (Unified payment interface).

The most important thing is that the payment gateways work as trust custodian – which protects against any dispute between the dealer and the consumer. Today we are completely missing in UPI (Unified payment interface) today but this phase will be in the form of maturity.

How is the UPI (Unified payment interface) secure?

Nilekani said that the security is silly proof because the transaction will be done in a highly encrypted format.  Already, the NPCI’s IMPS(Immediate Payment Service) network transfers more than Rs 8,000 crore a day, which will grow faster with the use of mobile phones.

In this case, MPIN will be used instead of OTP. There are two factors for authorization – will essentially be OTP by RBI.

Is the UPI available for use now?

It was launched in January 2016 and made available to banks beginning April 11, 2016. However, it is still in the starting phase and people will take some more time to understand it.

“There are 29 banks have gone to launch the UPI, who had agreed to provide UPI service to their customers. I believe many banks will join the UPI this year and the numbers will go forward. NPCI MD and CEO AP Hotta said, “Our focus is keeping a VISION on RBI’s ‘low liquidity’ and moving towards more digital society.

What are the fees or charges for using the UPI?

NCPI has indicated that they charged Rs. 0.50 per transaction, on your bank statement, it would appear as an IMPS transaction.

Nowadays, the Payzapp is not charging anything to use its app.

Is it possible to completely replace cash or card by UPI App?

According to the Reserve Bank of India estimates, about 18% of GDP in the country is one of the most printed currency-dependent in India.

UPI’s success depends on a few factors. For example, consider these numbers:
There are 759 million Aadhaar cards, and with 26 million Aadhaar numbers getting added every month, soon the total Aadhaar card issuance will touch a billion by next year. Out of India’s 899 million mobile phones, 119 million are smartphones.

Link to Download Famous UPI Apps:

S.No UPI Apps Name Android
1 Andhra Bank ONE – UPI App Download
2 Axis Pay UPI App Download
3 Bank of Maharashtra – Maha UPI Download
4 Canara Bank UPI – eMpower Download
5 CSB UPI Download
6 DCB Bank UPI App Download
7 HDFC Bank MobileBanking Download
8 ICICI Pockets Download
9 KBL SMARTz (UPI) Download
10 Lotza – UPI Download
11  OBC UPI PSP Download
12 PhonePe Download
13 PNB UPI Download
14  SBI Pay Download
15 South Indian Bank – SIB M-Pay (UPI Pay) Download
16 Google Pay (Tez) Download
17 UCO UPI Download
18 Union Bank UPI App Download
19 United UPI Download
20 UPI Bank Transfer with Friends Download
21 Vijaya UPI Download


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