What Is UPI And How Does It Work : UPI stands for Single Payment Interface (UPI). It allows money to be moved instantly via one’s cell phone from one bank account to another. Payments can only be made on a mobile device with an app. The transfer of money through UPI operates on a 24×7 basis. You must have a bank account with a member bank to use UPI, i.e., your bank should authorize you to use the UPI facility. The State Bank of India (SBI), HDFC Bank, and ICICI Bank are some of its member banks.
After you’ve tested if your bank funds UPI payments, you need to download the UPI help software to your mobile phone, some of the widely used UPI payment apps are BHIM, built by NPCI, and there are some private players such as Paytm, PhonePe, Google Pay, Amazon Pay, etc.
Note, for authentication purposes, and your mobile number must be registered with your bank account.
After the chosen UPI app has been downloaded, you will be required to select the bank from the options offered. Your bank will give you a one-time password to check that it is your bank account (OTP). Once the OTP is verified, your virtual payment address (VPA) will be created.
Here is how you can set up a UPI account using the BHIM app:
Step 1: Download and install the BHIM app from the Google Play Store or Apple App Store.
Step 2: Select your preferred language.
Step 3: Select the SIM which has your mobile number registered with your bank account.
Step 4: Set up a four-digit login password. You need to enter this four-digit password to access the app.
Step 5: Select and link your bank account. Set your UPI PIN by providing the last six digits and expiry date of your debit card.
Your account is now registered, and you can send or request for money to be transferred to your account. Remember, you cannot link your mobile wallet to UPI, only a bank account can be linked to UPI. You can connect more than one bank account to UPI.
There are three ways to transfer money via UPI by entering the receiver’s virtual payment address (VPA), account number, and IFSC code or QR code.
According to the NPCI website, at present, the upper limit per UPI transaction is Rs 1 lakh per account per day. Different banks may have their sub-limits; hence, one should check with the bank.