UPI Full Form - Unified Payment Interface
The Indian Government's aim to operate a cashless economy subject to the technology-driven forth by the Industrial revolution has been stimulated by the Unique Payment Interface. The UPI enables cashless transactions between parties through a smartphone. Introduced in 2005 by the National Payment Corporation of India (NPCI), almost all major financial institutions expressed their reservations regarding the system, with a handful of national banks formally adopting it. But in the wake of demonetisation, technological advancements, and COVID-19, this payment system experienced widespread acceptance across India.
What is the UPI Full form?
The UPI stands for Unified Payment Interface (UPI). The UPI full form symbolises a Unified platform where the users can facilitate the transfer of funds via their smartphones. The UPI system allows users to link bank accounts with their smartphones through a mobile application. This mobile application allows users to avail themselves of numerous banking features and conduct transactions with diverse parties and merchants. This alternative has showcased wider acceptability among users as they are not required to provide the IFCS code and bank account details on every transaction. The transactions performed through the UPIs are facilitated in real-time, providing clarity to both parties involved.
Participants in UPI
The following participants are generally involved in facilitating a UPI transaction:
Payer PSP: A payer PSP, also known as a Payment service provider, refers to the service provider of the payer's mobile application employing.
Payee PSP: A payee PSP refers to the merchant provider of the mobile application the beneficiary is utilising in the transaction.
Remitter Bank: Refers to the Bank that holds the remitter's account. The Bank caters to the debit request made by the remitter through UPI and processes it in real-time.
Beneficiary Bank: On the other hand, the beneficiary bank caters to the credit request on behalf of the beneficiary.
NPCI: The NPCI stands for National Payment Corporation of India. The regulatory body oversees the retail payments and settlement system across the country. The NPCI aims to maintain and provide a reliable settlement mechanism in India.
Bank Account Holder: The bank account holder indicates to the account holder the bank linked their respective account with the UPI to facilitate transactions.
Merchants: The merchant refers to businesses offering customers services and products. They can do so either physically or through online avenues.
Features and Benefits of UPI
The UPI meaning can be further elaborated into a platform that provides an option to users to implement transactions through their mobile devices. It provides the following benefits and features to the users:
- The major benefit of the UPI is that they can implement real-time transfer anytime, anywhere, at their discretion.
- The user is not limited to a single bank account to perform transactions. They can link multiple accounts with the mobile application to facilitate a UPI transaction.
- The user of the UPIs is not required to enter multiple details, such as their account number and IFSC code, to transfer funds from one bank account to another. This is why it is often deemed a more enhanced version of the IMPS.
- The UPI system employs a two-step authentication process to safeguard it from any duplicity.
- The system is not limited to businesses and merchants. Users can transfer funds among their acquaintances on a real-time basis.
- The UPI are also widely employed to conclude various utility-related transactions such as payment of electricity bills, online payments etc.
UPI Benefits For Bank
- The UPI offers a two-factor authentication process with a single click.
- Employing sophisticated technological infrastructure to facilitate transactions on a real-time basis.
- The UPI system enjoys universal acceptability and offers a safe and secure avenue for the parties to perform transactions.
UPI Benefits For Merchants
- The UPI system allows merchants to facilitate a convenient collection of funds from customers.
- A convenient alternative to debit/credit cards where the merchants are required to store the virtual addresses of the customers.
- The UPI safeguards the merchant from the hassle of cash on delivery option where the fund collection is prone to many irregularities and inconsistencies.
UPI Benefits For Customers
- The customers can avail of the round-the-clock availability of the UPI system.
- The customers are not required to produce confidential information to facilitate a transfer through UPI.
- The UPI entails a single-click authentication process making the implementation more feasible and accessible.
Procedure to Register & Generate PIN Using UPI
The user can enable the registration and PIN generation process by implementing the following steps:
Registration and Link UPI with Bank Account
STEP 1: The individual inclined to avail of the UPI can select and download from the wide variety of UPI mobile applications available in app stores and bank websites. STEP 2: The user is should create their profile by mentioning details such as the name, virtual ID, password etc.
STEP 3: The user should navigate towards the “Add/Link/Manage Bank Account” tab featured on the dashboard and link the bank account with their virtual ID.
PIN Generation - UPI
The user must Select the bank account through which they want to implement the transaction and utilise the following options:
Generate UPI PIN
STEP 1: The user will be provided with an OTP from the Bank on their registered mobile number.
STEP 2: The user should mention the last six digits of their credit/debit card along with the expiration date.
STEP 3: Enter the OTP received on the number and mention the numeric UPI PIN the user wants to set to facilitate the transactions. Click on the submit tab after successfully providing the details.
STEP 4: The user will receive a notification on their phone after concluding a successful submission.
Procedure to Perform UPI Transactions
A UPI transaction would generally entail two parties categorised into PUSH (Send Money) and PULL (Request Money).
PUSH (Send Money)
- The user is required to successfully login into the UPI Application
- Select the option ‘Send Money’/ ‘Payment’ after a successful login.
- The user must then enter the beneficiary's virtual ID and the amount they want to debit.
- The user is required to check the payment details and selects the ‘confirm’ option.
- After confirming the payment, the user must mention the UPI PIN.
- They will receive the transaction's success, or failure implemented almost immediately.
PULL (Request Money)
- Login to the UPI Mobile Application of the Bank
- Select the option to collect the money after a successful login
- The user must mention the remitter's virtual ID and the amount to initiate the credit request.
- The user can then review the payment details on the confirmation screen and select ‘Confirm’ if the details are accurate.
- A payer would receive a notification on their phone concerning the request for a money transfer.
- The payer could review the payment request on their phone after clicking on the notification received.
- The payer can then choose to accept or decline the payment request.
- If the payer chooses to honour the payment request, they will be required to conclude it by mentioning the UPI PIN to authenticate the transaction.
- The payer would receive a notification regarding the success or failure of the transaction requested.
- In case the transaction is successful, the beneficiary will receive a notification from the bank entailing the details of the amount credited to the account.
Limitations of UPI
There are some limitations set on UPI-related transactions. The amount limit set on the UPI transaction is one lakh. A user can perform up to 20 transactions per day through the UPI system. However, it is to be noted that these limitations generally vary from bank to bank. The following table showcases the per transaction limit Bank-Wise.
|Bank||Per Transaction Limit|
|Bank of Maharashtra||Rs 20,000|
|Canara Bank||Rs 1,00,000|
|Bank of Baroda||Rs 25,000|
|Canara Bank||Rs 1,00,000|
|Citi Bank||Rs 1,00,000|
|Punjab National Bank||Rs 1,00,000|
|State Bank of India||Rs 1,00,000|
|Standard Chartered Bank||Rs 1,00,000|
|Union Bank of India||Rs 1,00,000|
|Yes Bank||Rs 1,00,000|
UPI – Charges
The UPI transactions were introduced to facilitate a convenient transfer of funds on a real-time basis. The parties don’t have to bear fees or charges to perform a UPI transaction. There have been speculations that the government may levy fees on these transactions just like IMPS. But no official announcement has been made regarding the same.
Important Factors to Consider while Operating UPI
The UPI provides an avenue for users to perform transactions entailing the transfer of funds through their smartphones. However, users must vary the following factors while operating the UPI system to avoid inconsistencies and inaccuracies.
It is of utmost importance that the user maintains the confidentiality of their four or six-digit UPI PIN. A transaction through the UPI system cannot be facilitated without a UPI PIN code. So, the user must not share the UPI PIN with anyone so that they can safeguard their funds from any fraudulent activities.
The UPI Transactions are performed through the smartphones of the users. It is advised that the user shall apply screen locks on their phones so that they can secure their bank-linked UPI application in case of theft.
The user who facilitates UPI-based transactions are provided with a UPI ID. This unique UPI ID is utilised to conclude funds transfers from other users. When implementing the transaction, the user must mention or share their accurate UPI ID with the other party. Special consideration should also be given to the UPI ID while receiving payments. The UPI ID safeguards the transaction from any inconsistencies and incorrectness.
Avoid Using Mulitple UPI Apps
It is not advised to use or install more than one UPI application. Employing multiple UPI applications may hamper the operating system of the phone. If the parties employ different apps to facilitate a transaction, it is important to double-check the accuracy of the UPI ID.
Cautious of Unverified Links
The user of the application must steer away from clicking on any unverified links. There have been reports of victims falling prey to many fraudulent activities and scams after clicking on the unverified links sent to them via SMS and e-mail. Such links can encroach on sensitive information in smartphones.
Banks Offering The UPI Facility
Here is a list of some banks that offer UPI facilities to their customers so they can conveniently transfer funds through their smartphones.
|Axis Bank||PSP and Issuer|
|Bank of Baroda||PSP and Issuer|
|Canara Bank||PSP and Issuer|
|Bank of Maharashtra||PSP and Issuer|
|Central Bank of India||PSP and Issuer|
|DBS Digibank||PSP and Issuer|
|HDFC Bank||PSP and Issuer|
|HSBC Bank||PSP and Issuer|
|ICICI Bank||PSP and Issuer|
|IDBI Bank||PSP and Issuer|
UPI Customer Care
The Government of India has launched a toll-free number to cater to the diverse set of queries and issues concerning with the payment system.
Toll-Free Number: 1800-1201-740, 022-45414740
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Frequently Asked Questions (FAQs)
What is UPI?
UPI is a payment system that allows parties to transfer funds through their smartphone on a real-time basis.
What is UPI Full Form?
The UPI full form is Unique Payment Identification.
What is the Difference Between a UPI ID and a PIN?
The UPI ID is a unique identity employed as a virtual payment address for the users. Whereas the UPI PIN is a four or six-digit number that the user must mention facilitating the transaction from the payment system.
Can I link my UPI ID with multiple accounts?
Yes, the user utilising UPI can choose to link their UPI ID with multiple bank accounts.
What to do if UPI not working?
The user can contact the customer services established to cater to customer queries.
Is it mandatory for the customer to hold a bank account for UPI, or can it be connected to a card or wallet?
It is required that the customer must link their bank account with their UPI ID to facilitate the transactions through the system.
What is the daily UPI transaction limit?
The transaction limit on UPI transactions varies from bank to bank.
Are UPI and BHIM the same things?
BHIM is a mobile application wallet app that performs digital payment transactions. On the other hand, UPIs are payment model system that facilitates the transfer of funds through bank-linked mobile apps.
Is UPI free?
Users do not have to bear fees or charges to perform transactions through UPI.
Who regulates UPI?
The Reserve Bank of India regulates the UPIs through the National Payments Corporation of India (NPCI).
What is VPA in UPI?
VPA or Virtual Payment System is the address through which the UPI transfers can be facilitated.
What is my UPI ID?
Users can view their UPI ID on the mobile application by tapping their profile.