Sunday, November 27, 2016

Here's everything you need to know about Unified Payment Interface

National Payments Corporation of India (NPCI)  has announced bank applications for the Unified Payment Interface have officially become operational, which means that UPI apps of banks can now be downloaded and used for transactions:

What is UPI and what can a user do with the app?

UPI is a payment system that allows money transfer between any two bank accounts by using a smartphone. UPI allows a customer to pay directly from a bank account to different merchants, both online and offline, without the hassle of typing credit card details, IFSC code, or net banking/wallet passwords.

Some examples of these include in-app payments – where the merchant app, may send the request to the PSP app on the same device, instead of a collect request via the PSP network. Another
example may be for proximity payments, where the payer and payee are using different
devices, but are close enough for the information to be transmitted locally.

Banks available with UPI Scheme

 Andhra Bank, Axis Bank, Bank of Maharashtra, Bhartiya Mahila Bank, Canara Bank, Catholic Syrian Bank, DCB Bank, Federal Bank, ICICI Bank, TJSB Sahakari Bank, Oriental Bank of Commerce, Karnataka Bank, UCO Bank, Union Bank of India, United Bank of India, Punjab National Bank, South Indian Bank, Vijaya Bank and YES Bank UCO Bank,State Bank of India,HDFC ,Kotak Mahindra Bank-- available on the Google Play Store

Steps to get started with UPI

1. Download the app from Play Store and install in phone; 2. Set app login; 3. Create virtual address; 4. Add your bank account; 5. Set M-Pin; and 6. Start transacting using UPI

How safe is UPI?

It is safe as the customers only share a virtual address and provide no other sensitive information.

What kind transactions can be performed via UPI?

Merchant payments, remittances, bill payments among others.

Is there a per transaction limit?

The per transaction limit is Rs.1 lakh.

How exactly does one make a payment transaction?

A user can make an in-app payment for goods or services purchased online. For instance a site allows purchase of a movie-on-demand.

User clicks buy, the site/app triggers the UPI payment link and is taken to the pay screen of the UPI app, where the transaction information is verified and a click followed by entry of a secure PIN completes the purchase.

Among the options one gets in UPI, one of it is scan QR code. Say, you are at the grocery shop, a mall or a food court and the establishment accepts UPI payments. You can open the app, scan the QR code at the payment counter and the money will be transferred from your account to the merchant, thus allowing for cashless transaction.

Besides eliminating the need of carrying cash and credit / debit cards around, UPI also does away with the OTP, making the payments process much simpler. After using UPI, this next-gen payments system does look promising and with more people starting to use it, we’re can soon move to a completely cashless economy.

The difference between UPI and payment modes such as NEFT and IMPS is that bank account details are not shared in the transaction, and transactions can be made 24×7 all year round. NEFT transactions do not happen on holidays and during non-banking hours, there are limitations in funds transfer; in IMPS, account details and details like the 11-digit Indian Financial System (IFS) Code, which indicates a bank’s branch code, have to be entered.

The other advantage is that it is possible to have multiple unique virtual addresses and use multiple bank accounts, and without necessarily having to go through your own bank for a variety of transactions. For the shopkeeper or other large establishments, it also means not having to run the transaction through an electronic machine such as a card reader.

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