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What is UPI (Unified Payments Interface): Full Form, Meaning, Features & Benefits
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UPI payments for personal transactions are free of extra charges. However, digital wallet transactions above Rs 2,000 may have associated costs.
UPI payments are highly secure and regulated by the Reserve Bank of India and NPCI. Mobile payment apps strictly adhere to the guidelines set by these regulators, ensuring the safety and reliability of UPI transactions.
An example of UPI is transferring money using the Paytm app to a friend’s phone number linked with their UPI ID. Enter the recipient’s UPI ID or mobile number, input the amount, and authenticate the payment with your PIN.
To make a UPI payment, open your UPI-enabled app, enter the recipient’s UPI ID or phone number, specify the payment amount, and authorise the transaction using your PIN or biometric authentication. The payment is instantly processed and transferred directly from your bank account.
UPI is owned and developed by the National Payments Corporation of India (NPCI). NPCI is an organisation that operates retail payments and settlement systems in India, and it manages UPI as part of its efforts to streamline digital payments.
Yes, you need a bank account to use UPI. Your bank account must be linked to a UPI-enabled mobile app, which allows you to make and receive payments through the UPI system. The app facilitates transactions directly from your bank account.
No, you need a SIM card with an active mobile number to use UPI. The SIM is essential for receiving OTPs and other transaction-related notifications on your mobile device, ensuring the security of your UPI transactions.
UPI works by linking your bank account to a UPI-enabled app. The app uses your UPI ID to process the payment when you initiate a transaction. Transactions are authenticated with a PIN or biometric data, and funds are transferred directly from your bank account to the recipient’s.
Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
The Unified Payments Interface (UPI) has revolutionised financial transactions by simplifying and streamlining the process. Developed in India, this innovative system enables easy and fast money transfers directly between bank accounts using a mobile app. UPI ID means integrating various banking services into a single platform, making it easier for users to manage their transactions. UPI offers a seamless way to handle payments, transfers, and more for those with current accounts. This guide will explore what is UPI ID , how it works, and its key benefits.
What is UPI ID & Full Form
UPI full form is Unified Payments Interface. A UPI ID, also known as a Virtual Payment Address (VPA), is a unique identifier used to receive payments directly into your bank account. This UPI ID simplifies transactions by eliminating the need for traditional bank details.
Features and Benefits of UPI
How does UPI ID work?
Here’s a simple breakdown of how a UPI ID functions-
How many Participants are involved in the UPI transaction?
When it comes to a UPI transaction, several participants are involved in the process.
Multiple participants are involved in a UPI transaction, including remitter and beneficiary banks, NPCI, merchants, bank account holders, and PSPs. Each participant plays a crucial role in ensuring smooth and secure payment through UPI, making it a convenient and efficient payment method for users.
How to Send Money Through UPI- Step-by-Step Process
To send money through UPI, you must first ensure that you have a UPI-enabled bank account linked to your mobile number. Most banks offer this feature so you can check with your bank for clarification. Once you have confirmed that your bank account is UPI-enabled, you can proceed with the following steps.
What is a UPI PIN?
A UPI PIN is a 4 or 6-digit code users set during UPI application registration. This confidential PIN confirms transactions and should never be shared to prevent fraud.
How to Generate a UPI PIN?
Follow these steps to generate a UPI PIN:
Note – Steps may differ from platform to platform.
How to Create your UPI ID at kotak Bank?
How to Find Your UPI ID?
Let’s see the steps to help you find your UPI ID.
These steps apply universally across different UPI apps.
What are the Benefits of UPI for Merchants
UPI offers some great perks for merchants, making it a popular choice-
What are the Benefits of UPI for Customers
UPI offers several advantages that enhance the convenience of managing finances-
UPI streamlines financial activities, making daily transactions simpler and more efficient.
What is the UPI transaction limit
UPI has a specific transaction limit to ensure user security and manageability. Here is an overview-
These limits are set to balance convenience with security, ensuring safe and manageable transactions. Always check with your bank for current limits and applicable variations.
What is a UPI Reference Number?
A UPI reference number, also known as a UTR (Unique Transaction Reference), is a 12-digit code created automatically for each UPI transaction. This unique number is shown underneath the amount you deposited. It's a tracking tool that allows you to monitor and identify your transactions. If you need to contact customer service or your bank to address an issue or check the progress of your payment, use this reference number. It makes handling your transactions easier and more transparent.
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