Unified Payments Interface, known as the UPI in layman’s terms, is to be able to pay money for various services like paying bills, online shopping, and money transfers to individuals or merchants digitally, faster, and seamlessly.
UPI gateway for transactions in today’s context is regarded as the Central Nervous System of payments in India. It has been developed by the National Payments Corporation of India (NPCI) that facilitates an instant, a real-time interbank transaction that helps in transferring funds between two bank accounts, such as the peer-to-peer (P2P) and person-to-merchant (P2M) transaction through a mobile platform.
The importance of UPI is immeasurable, given how it has revolutionized how people in India now make payments. UPI has made the money transfer as easy as just a click away. The UPI ID is unique to each person, making it a very secure and trustworthy digital system of payment.
All About UPI: Unraveling the Secrets of How UPI Earn Money
This blog helps provide a comprehensive overview of the Unified Payments Interface, UPI in India, highlighting how UPI has transformed the payments system with various UPI services like online shopping, payment of bills, and hassle-free money transfers between accounts.
This blog lets you quickly understand what UPI is, how it works, and its features, benefits, and applications. It takes you through registering and discusses the security measures UPI took for fraud prevention and unauthorized transactions.
UPI Features and Benefits:
UPI, the real-time payment system, has many features and benefits that enable individuals to make digital transactions accessible, even to those with minimal knowledge of mobile use or technology. Being a cashless transfer using their unique UPI ID, it has become a popular choice amongst millions of users in India. Some of the UPI features and benefits are:
- Instant Fund Transfer– UPI allows you to transfer funds instantly between bank accounts. The transfer has no waiting time or delay, making it a quick and convenient payment option. There is no requirement first to set up an account for fund transfer and no delay time for the slow verification process traditionally.
- 24/7 Availability– UPI operates round the clock, weekdays/weekends/ public holidays. It is accessible every day through mobile devices. This is a beneficial feature, especially when one must make a transaction outside banking hours. A person does not have to visit a bank or branch to complete the transaction, unlike in the old days.
- Multiple Bank Accounts– UPI allows users to link multiple bank accounts to the platform. Making them accessible from a single app. It gives us great flexibility for individuals with various accounts.
- Easy and Secure Transactions– UPI provides us protection against any fraud, and at the same time, it’s very user-friendly and does not require complicated steps or technology.
- No Transaction fees
How Does UPI Work?
UPI is a digital payment platform that allows users to make money transfers using the many UPI features available. It follows a very simple process that can be set up easily via an app on the smartphone.
- Registration and Setup Process– To use UPI, users must download the app on their smartphone. Once downloaded, the user creates a UPI id by linking their single or multiple bank accounts. This ID is used to make or receive payments in your account.
- Transaction Process Step-By-Step– The user opens the app by clicking on the UPI logo and selects transfer or send money for one of the many UPI services that are available, enters the UPI ID, which could be either the mobile number or the account number, enters the amount, writes any remark for reference and confirms the payment and with a click the transaction is completed is made, the transaction with UPI is that simple.
- Security Measures and Fraud Prevention– Two-factor Authentication, such as OTP, and biometric authentication, like fingerprint or face recognition, are some measures used to prevent fraudulent or unauthorized transactions. Posting frequent alerts to users to report suspicious activities and constantly reminding them not to share their OTPs have been very helpful.
UPI Services and Applications:
UPI has become one of the most popular, reliable, and fastest modes of fund transfer for users in all the strata in India. From a housewife to paanwala to a swanky shop owner in a mall, all have moved to this form of digital payment. They need to just click on the UPI Logo and use it for many purposes, such as:
- Payment Of Bills– Payment of utility bills no longer requires you to queue up or miss the deadline as the payment has now become a child’s play of just clicking on the UPI logo and making the bill payments as many of the service providers are now UPI enabled
- Online Shopping– Purchasing stuff on any e-commerce platform has always been challenging. Being UPI enabled, the payments are quick, smooth and frictionless.
- Money Transfers Between Individuals– UPI ID is needed to transfer to anyone, whether to family or friends in need. The
- Merchant Payments– Merchants across India have started accepting payments through UPI, enabling them to have contactless, cashless transactions. It also helps them keep track of checks and balances as the statements are just a click away, it also helps to locate any missed transactions.
Comparison with Other Payment Systems
Many digital payment methods are used for making electronic transactions. Some of them are
- Mobile Wallet
- Credit/Debit Card
- Online banking
- Gift cards
UPI just uses UPI ID, whereas other digital payment methods, like using the credit card or debit card, require the user to input the details, which can sometimes be cumbersome. UPI transfers are instant and real time whereas a credit card transaction would take time to reflect on one’s statement.
Cryptocurrency is a fairly new method, but it has many risks involved due to its volatility, lack of acceptance, and not being used widely. On the other hand, a gift card becomes useless after its expiry date and sometimes doesn’t have an option to be used partially.
A wallet requires the user to store and use the funds, but UPI is a direct transfer. Wallet also faces issues of getting locked because of a lack of KYC and delaying transactions. UPI services and UPI features have many benefits as they are the quickest, one of the safest methods available 24 by 7 and just a touch away.
“To understand it all better, Rahul Malodia, one of the youngest Chartered Accountants and one of the best business coaches, provides great tips on managing your finances. He advises people to think rationally and invest sensibly. According to him, it’s imperative to make a budget and stick to it and divide the funds into various buckets such as expenses and investments, that help to build and increase your wealth over time.”
CA Rahul Malodia is the founder and CEO of Malodia Business Coaching Pvt. Ltd. He is a Business Coach, Mentor & Investor. He has trained over 25,000+ Businessmen across India.