What is UPI Pay

What is UPD

National Payments Corporation of India developed Unified Payments Interface (UPI), an instant real-time payment system (NPCI).

The interface enables peer-to-peer (P2P) and person-to-merchant (P2M) transactions between banks.

It is used on mobile devices to transfer payments between bank accounts immediately.

The mobile number associated with the device must be registered with the bank. The recipient's UPI ID can be used to send funds.

It is managed by the Reserve Bank of India and operates as an open-source application programming interface (API) on top of the Immediate Payment Service (IMPS) (RBI).

UPI PIN is required to send funds using any UPI app. You should be aware that Paytm, Phonepe, Google Pay, and SBI Pay, among others, use the UPI payment mechanism to send money.

In addition, it is used to pay retailers. In each of these conditions, you must enter the UPI PIN. But, we often forget it. We can reset this PIN without difficulty.

In this post, I will explain all you need to know about the UPI PIN.

You must go through this whole article in order to get complete knowledge about this important piece of information. That cannot be taken lightly.

What is UPI PIN?

You must use the key to unlock your vault.

Similarly, if you need to withdraw funds from your bank account, you must provide your UPI PIN.

This is required if you wish to access your funds via UPI apps.

Separate keys are required for all other payment methods, including ATM, Cheque, NEFT, IMPS, and RTGS. In fact, banks must verify your identity before granting you access to your bank account.

The UPI PIN is one such way of authentication. It is similar to the ATM PIN. Thus, be cautious about it.

UPI-PIN is a 4-to-6-digit secret code that you generate/set when you link a bank account to a BHIM UPI–App.

Hence, each bank account would have a unique UPI PIN.

It is used when sending money or checking your balance via a UPI app. It only functions with UPI apps and *99# banking.

Full form of UPI PIN

Unified Payment Interface Personal Identification Number is the full form for UPI PIN.

Apps that use this PIN

The following apps use the UPI PIN to make sure that a money transfer is authentic. I'm only going to list the big ones.

• BHIM App
• Google Pay (Now GPay) 
• PhonePe
• Paytm 
• Amazon Pay
• BHIM SBI Pay
• BHIM PNB

Why We Need a New PIN

This is required in order to ensure that the BHIM app or any other UPI app is safe.

You would agree that a PIN should be needed before the payment is approved. Because mobile wallets don't need this PIN, they aren't as safe.

If you lose your phone, the UPI PIN makes it so that no one else can send money from it.

The app on your phone would ask you for your UPI PIN, which you would keep secret.

In addition to this, many UPI apps also need a passcode to open. So, it gives you two times as much safety.

In the near future, your fingerprints might be used instead of this PIN.

But to do that, you need a phone or other device that can scan your fingerprint. You may use your fingerprint to log in to the Phone Pe now.

When linking a bank account for the first time to an app such as Phonepe, Google Pay, or Paytm, you must create a UPI PIN.

Creating a UPI PIN for the first time and resetting it are similar processes. To reset the PIN, you must have the following things and/or information.

1. The last six digits of your debit card; 
2. The expiration date of your debit card; 
3. Access to the mobile phone associated with your bank account.

If you have the aforementioned information and your mobile phone, you can reset your password.

To explain the method in detail, I will use the example of Phonepe.

How Does UPI Work?

To complete a transaction, the user will simply need to provide a Virtual Payment Address (VPA) virtual address.

The National Payments Corporation of India (NPCI) created UPI, and the Reserve Bank of India regulates it (RBI).

UPI is gradually becoming the most popular method of electronic payment. The following items are needed to transfer funds via UPI:

NPCI manages the RuPay payments system, which is similar to Visa and MasterCard.

It facilitates the interconnection and transfer of funds between banks. NPCI also operates the Instant Payments Service (IMPS) scheme.

UPI is regarded as the superior method of IMPS.

1. A smartphone 
2. An active bank account 
3. The mobile number must be active and linked to the bank account

UPI is increasingly becoming the most popular method of electronic payment.

The UPI interface is compatible with the majority of banks and a large number of digital wallets, and payment applications are adopting UPI.

These applications include Google Pay (GPay), PhonePe, Paytm, and others.

Features of UPI

Currently, every bank account holder mentions UPI money transfers.

If you haven't used UPI frequently, then consider the following:

• UPI payments are normally processed within seconds; 
• Nearly every bank supports UPI transactions via mobile applications; 
• Payments are totally secure. 
• UPI Payment facility enables people to request money from some other person, which is not an option with other payment methods such as IMPS, and NEFT 
• These mobile payment applications also offer the facility of bill payments, which means that you can set up timely reminders for all your bill payments and make the payment from your mobile phone

Who launched UPI?

The National Payments Corporation of India (NPCI) collaborated with the Reserve Bank of India (RBI) and the Indian Banks Association (IBA) to launch the Unified Payments Interface (UPI).

NPCI manages the RuPay payment system and is equivalent to MasterCard and Visa.

It facilitates the interconnection and transfer of funds between banks.

NPCI's Instant Payments Service (IMPS) is another effort. UPI is currently considered an improved version of the IMPS system.

Why Should You Make Use of UPI?

UPI, or Unified Payment Interface, has more advantages than you may imagine. The following is an example of one of them:

simple And easy, no-hassle online payments

• A method that is both safe and secure for the transfer of money
• It enables you to pay bills, shop on e-commerce websites, and so on.
• Allows you to pay by scanning QR codes at local department stores, chemist shops, and so on.
• Paying regularly through UPI also allows you to get discount vouchers, cash back, and other benefits.

Registration in a UPI-enabled Application

In a short amount of time, a user can transfer money straight from his or her bank account to the recipient's bank account via UPI.

All of this has been fully removed by the use of UPI.

Once the sender has completed the UPI registration process, he or she can transfer funds with a few clicks on a UPI payment application such as PhonePe, GPay, or PayTM.

How to Signup in UPI

Follow these steps to finish your UPI registration:

1. Install the PhonePe UPI mobile payment app.
2. Just enter your phone number. If you have a dual SIM phone, you may be asked to select the SIM slot that contains your mobile number
3. To validate your mobile number, an SMS will be issued from your number.
4. After that, you need to select your bank from the list that's displayed to you. 
5. Please double-check that the mobile number registered with your bank matches the one you entered previously. Your bank account information will now be retrieved from the bank using your mobile phone number
6. When you link your bank for the first time, you will be asked for a UPI PIN. You will need your debit card information to set this up
7. Your bank account has now been linked through UPI, and you are ready to make your first payment.

Creating UPI PIN

To generate your UPI PIN, you must first install a mobile payment application on your mobile device, such as Paytm.

After installing the application, you need to create your own UPI profile/account and complete the following steps to generate your UPI PIN-

1. Open a UPI payment application, such as Paytm, on your mobile phone
2. Tap on the ‘Profile‘ icon in the top left corner of the Paytm mobile application
3. In the left sidebar that opens, scroll down to the ‘Payment Settings’ option and click on it
4. Next, select 'UPI & Connected Bank Accounts' to view the list of your linked bank accounts.
5. 5. If the UPI PIN for a bank account is not configured, the 'Set PIN' option will appear under the bank account.
6. Click on ‘Set PIN’
7. Now, input the last 6 digits of your card number, together with its expiry date
8. After that, you will receive an OTP on your registered mobile number
9. On the screen that opens up next, enter the one-time password along with the UPI PIN of your choice.
10. When you click "Submit," your UPI PIN is set.

How to Create an M-PIN?

Follow these procedures to generate an M-PIN:

1. Open the mobile payment application on your device and search for the “Create M-PIN” option
2. Enter your debit card details such as your card’s expiry date, and the last 6 numbers of your debit card
3. Enter the OTP sent to the mobile number you registered.

Then, enter the M-PIN of your convenience and click "Submit."

What is a UPI transaction?

A UPI transaction is essentially a method of transferring funds from one bank account to another.

The Paytm UPI mobile application allows you to send money in a variety of ways.

Each of these options is equally simple to use, whether it is a mobile number, QR code, UPI ID, or account number.

To transfer money using UPI, each user must have an ID, known as the UPI ID.

The UPI ID is a one-of-a-kind identity for a bank account that is used to transfer funds from one bank to another.

You do not need to enter the receiver's UPI ID with UPI payment apps like Paytm.

To send money over UPI, simply choose the receiver's contact from your phone book or enter the receiver's contact number.

The UPI PIN, on the other hand, is a four or six-digit personal identification number that is necessary to send money over UPI.

Every account holder has the option of creating/modifying his or her UPI PIN.

How can I use UPI with the Paytm app?

• Install Paytm UPI apps.
• Just enter your phone number. If you have a dual SIM phone, the app will prompt you to select the SIM slot that contains your mobile number.
• The UPI app will send you an SMS to verify your phone number.
• After that, you'll need to choose your bank from the list that appears on the screen. Please double-check that the mobile number registered with your bank matches the one you entered earlier.
• The Paytm UPI app will now fetch your bank account information using your mobile number
• If you are linking your bank for the first time, you must create a UPI PIN by entering your debit card details, It mainly asks for the last six digits of your ATM card from that particular bank.  
• You have successfully linked your bank account using UPI and are now ready to make your first payment!

Check the Status of your UPI transaction on the Paytm App

Use these procedures to verify the status of your UPI transactions on the Paytm app:

1. Launch the Paytm app on your cell phone or tablet.
2. On the home screen, under the 'My Paytm' area, click on 'Balance & History.'
3. The following screen will display all of the bank accounts associated with your Paytm app.
4. Scroll down this page to see your whole transaction history.
5. You can check the status of any transaction and other details such as the transaction time, amount, transaction ID, and so on by clicking on it.
6. If necessary, you may also share the specifics of any transaction by selecting the 'Share' button in the top right corner of this screen.
7. You can view past transactions by scrolling down the screen.

Ways to Send Money Using UPI

You can use mobile applications to transfer money in the following ways:

1. Mobile number - 

This enables you to make payments and transfer money from a bank account linked with your mobile number.

2. QR code - 

Allows you to send money by scanning a QR code with your VPA, account number, IFSC, or mobile number.

3. VPA (Virtual Payment Address) -

 Use your UPI ID to send or request money from a bank account.

4. Account Number - 

This allows you to transfer funds directly to the bank account.

How do I complete a UPI Transaction?

You can make a UPI transaction using any of the following methods:

1. Choosing a Contact/Entering a Phone Number - 

Sending money is as easy as sending a text message.

Simply choose a contact from your phonebook or enter a mobile number, enter the amount to be transferred, and enter your PIN.

That's all! Your payment will be sent or processed within a few seconds.

2. Scan a UPI QR code - 

You can also send money via UPI by scanning the recipient's QR code.

Use a mobile payment app like Paytm on your phone, click 'Pay', and select 'QR code'.

Scan the receiver's QR code and enter the amount to be paid.

Just enter your PIN, and your payment will be sent to a receiver in a matter of seconds.

3. Entering UPI ID - 

To transmit money via UPI ID, simply launch the mobile payment application and input the receiver's UPI ID.

Following that, enter the amount to be transferred and confirm the transaction by entering your MPIN.

Your transaction will be completed in a few seconds most likely.

4. Input Account Number & IFSC - 

This is the traditional method of payment, which is also supported by UPI.

You can input the account number and IFSC of the person to whom you want to send money, as well as the amount and your PIN.

Your payment will be processed in a short amount of time.

Does UPI transfer need KYC?

The short answer is no in this case. For Paytm UPI money transfers, KYC is not required.

On the Paytm app, any user can perform UPI-based transactions without bothering about the security and safety of their personal information.

UPI money transfers need Paytm users to link their bank accounts.

Customers get automatically verified when they link their bank account with the Paytm app since banks have previously done the KYC check for all their users.

Limits on UPI Transactions

To maintain the safety and security of transactions, all the UPI payment applications like Paytm are governed by the standards of RBI.

According to regulations, Paytm's daily UPI transaction limit is Rs. 1 lakh per account.

The specific UPI transaction limit, which varies from bank to bank and may limit the amount that can be sent at a lesser value, must be noticed.

UPI Transactions fees

The Paytm mobile payments app supports UPI services and does not charge fees for completing UPI transactions.

The Paytm application does not charge for UPI transactions even if there is a daily limit of Rs. 1 lakh on UPI transactions.

How Does UPI Function?

Like credit/debit cards, UPI transactions require a VPA (virtual payment address) for sending and receiving money.

Virtual Payment Address, or VPA, is essentially the address to or via which UPI money transactions can be made.

By using UPI, you can transfer and/or receive money into your bank account using a VPA, which is a special financial address.

Your VPA is immediately created as you create your UPI account on the Paytm app.

You must now sign in to your Paytm UPI payment application and select the "UPI/Send Money To Anybody" option in to make a UPI transaction.

Choose the recipient from your phone's contact list, enter their mobile number if it is not already saved, or scan their QR code.

Click "Proceed" after choosing the bank account from which you want to make the transfer.

When you enter the UPI PIN for the chosen bank account, the money will be sent right away from your bank account to the recipient's bank account!

UPI participants

A UPI transaction involves the participants listed below:

1. The sender's bank
2. The second-party bank
3. NPCI
4. Merchants
5. Owner of a bank account
6. Payer PSP
7. Payee PSP

what is UPI 2.0?

UPI 2.0 is essentially an updated version of UPI with enhanced functionality and additional benefits.

The new UPI 2.0 is expected to be a more secure and comprehensive payment system with an easier and more efficient authentication procedure.

Features of UPI Version 2.0

• The UPI 2.0 function enables the payment of rent, energy, etc., utilising the UPI system.
• UPI 2.0 includes a pre-authorized transaction capability, enabling users to allow recurring transactions such as mobile bill payments before the due date.
• The biometric identification element of UPI 2.0 will include fingerprint mapping technology and an iris scanner. This will improve the safety of UPI transactions
• UPI 2.0 will monitor the speed of transactions to ensure that fraudulent transactions are identified and prevented before they are completed.
• UPI 2.0 will let transactions through even if your mobile number is linked to another bank account, which the existing UPI system does not permit. 
• The UPI 2.0 payment system will also permit payments using the Aadhaar number to enable transactions directly from people's bank accounts.

UPI History

Before the NPCI (National Payments Corporation of India) enabled inter-bank transactions through mobile applications, transferring funds from one bank to another was complicated.

This system, known as UPI, or Unified Payment Interface," and regulated by the Reserve Bank of India, allows customers to transfer funds immediately via a smartphone.

UPI or Unified Payment Interface has improved the financial lives of an incredible amount of people.

No longer is it necessary to recall account numbers, IFS codes, mobile phone numbers, and bank locations.

With UPI transfers, all you need is the Paytm UPI payment application and the contact information of the recipient saved in your phone to send money from your bank account to the recipients.

Paytm has made it easier to make UPI transactions from the convenience of your own home.

UPI Market Share

With growing awareness of UPI transactions and their advantages, the UPI market share continues to rise.

The total number of UPI transactions climbed from 93,000 in August 2016 to 800 million in March 2019.

In July 2021, the number of UPI transactions reached 43,250 crores, with a total value of Rs. 56,735 crores.

The highest average daily transaction was 10 crores (100 million), which was double the amount recorded in July 2020.

The total value of UPI transactions hit Rs. 8.27 lakh crore in December 2021, representing an annual growth rate of 99%.

In addition, UPI reported 1.94 million IPO mandates in June 2021, which climbed to 7.66 million the following month. In addition, UPI holds the largest part of India's $2 trillion in yearly digital payments.

UPI Related New Development 

As of April 2022, UPI reached a record high with 5.58 billion transactions totalling 9.89 quadrillion rupees.

Apple Inc. has made the decision to no longer accept payments via debit or credit cards for the purchase of apps or subscriptions in India.

This decision was made effective as of May 9, 2022.

Users in India with an Apple ID balance would no longer be able to use any other payment method besides Netbanking, UPI, or their own Apple ID balance.

Conclusion

The National Payments Corporation of India created UPI, a real-time payment system (NPCI) that  allows bank-to-bank P2P and P2M transactions. 

It transfers or send money to bank accounts instantly through mobile.

Customer must register mobile numbers  with UPDI then they can send  or receive money through UPI.

The Reserve Bank of India manages it as an open-source API on top of IMPS (RBI).

UPI apps require UPI PIN to send funds. Paytm, Phonepe, Google Pay, and SBI Pay send money using UPI.

It also pays retailers. Enter the UPI PIN in these cases. However, we often forget. Resetting this PIN is easy.