UPI - Unified Payments Interface

Transaction Initiation: Users initiate transactions by entering the recipient’s VPA, scanning a QR code, or providing a UPI ID to make payments. 

Authentication: The user enters a UPI PIN to authorise the transaction, ensuring account security. 

Transaction Processing: The app sends the payment request to the UPI server, which communicates with both the sender's and recipient's banks to verify and process the transaction. 

Confirmation: Upon successful transaction verification, users receive an instant confirmation message. Fund settlement between banks occurs soon after. 

Benefits for UPI 

Table below lists the various Benefits of UPI: 

Features of UPI  

The following are some of the significant features of UPI:  

1. Real-time, 24/7/365 availability 

1. Instant money transfers within seconds 

1. Payment requests via UPI message for individuals and merchants 

1. Zero transaction fees (no NPCI charges) 

1. No lower limit on transfer amount 

1. Utility bill payments with UPI AutoPay 

1. Supports multiple bank accounts in one app 

1. Secure payments with Virtual Payment Address (VPA) 

1. QR code payments for easy transactions 

1. Single-click two-factor authentication 

1. High transaction limits per NPCI guidelines

How to use UPI on Mobile Phone 

To use UPI, download a UPI-enabled app (e.g., Google Pay, Paytm, PhonePe) on a smartphone with an active bank account linked to the mobile number. With internet access, you can seamlessly transfer funds in real time. 

Follow the steps below to start using UPI on your smartphone: 

1. Step 1: Open a UPI-enabled app. 

1. Step 2: Verify your bank-linked mobile number via SMS to connect the app to your account. 

1. Step 3: Register by setting up a unique UPI ID (VPA). 

1. Step 4: Link your bank account and set a 4- or 6-digit UPI PIN for secure transactions. 

1. Step 5: Initiate transactions by entering the recipient's UPI ID, scanning a QR code, or selecting a contact, then confirm using your UPI PIN to complete the transaction.

How to Register and manage your UPI account 

Here is a step-by-step guide for registering, setting up, and managing your UPI account: 

1. Registration in UPI-Enabled Application 

1. Step 1: Download a UPI app from the App Store or Google Play. 

1. Step 2: Create a profile by entering details like your virtual ID (payment address), name, and password. 

1. Step 3: Go to the ‘Add/Link/Manage Bank Account’ option to link your bank account to your UPI virtual ID. 

2. Generating a UPI PIN 

1. Step 1: Select the bank account you want to use for UPI transactions. 

1. Step 2: Choose the “Generate and Change M-PIN” option to initiate the setup. 

1. Step 3: Enter the last six digits of your debit card and its expiry date. You’ll receive an OTP on your registered mobile number. 

1. Step 4: Use the OTP to set your preferred UPI PIN and click “Submit.” 

3. How to Reset UPI PIN 

1. Step 1: Tap on your profile photo in the top-right corner of the UPI app. 

1. Step 2: Under ‘Payment Methods,’ select the bank account, then tap ‘Forgot UPI PIN.’ 

1. Step 3: Enter the last six digits of your debit card and its expiry date. An OTP will be sent to your registered mobile number for verification. 

1. Step 4: Enter the OTP and create a new UPI PIN. 

4. How to Find UPI ID 

1. Step 1: Open the UPI app and tap on your profile photo. 

1. Step 2: Select the bank account for which you want to view the UPI ID. 

List of UPI-enabled Apps 

Examples of popular UPI-enable Apps:  

1. PhonePe 

1. Paytm 

1. BHIM (Bharat Interface for Money) 

1. MobiKwik 

1. Google Pay 

1. Uber 

1. Chillr 

1. Paytm Payments Bank 

1. SBI Pay 

1. iMobile (ICICI Bank) 

1. Axis Pay 

1. BOB UPI

UPI Transaction Types 

1. Push Transactions: These are user-initiated payments directly from the sender's account, often for purchases or bill payments. The National Payments Corporation of India (NPCI) and banks verify and approve the transaction. 

1. Pull Transactions: The recipient requests funds from the sender, commonly for billing purposes. After the sender's bank verifies and approves, funds are transferred to the recipient's bank account. 

Fund Transfer Methods via UPI

Here are the methods available to transfer funds using UPI through mobile applications: 

• Mobile Number: Transfer funds by linking your bank account to your mobile number for easy transactions. 
• VPA (Virtual Payment Address): Send or receive money using a unique UPI ID tied to your bank account. 
• QR Code: Scan a QR code linked to your account number, mobile number, IFSC code, or VPA to make payments. 
• Account Number: Direct transfers from one bank account to another by entering account details.

Are UPI Transactions Safe? 

The following features ensure that UPI based transactions are safe and secure: 

1. Multi-Layered Encryption: UPI uses advanced encryption methods (TLS, AES, PKI) to protect transaction data. 

1. Virtual Payment Address (VPA): Reduces the risk of sharing sensitive bank details by using a unique identifier for transactions. 

1. Device Binding: UPI apps are linked to specific devices, preventing unauthorized access from others. 

1. Transaction Limits: Banks set transaction limits to minimize potential fraud. 

1. Regulatory Measures by RBI: The RBI enforces strong authentication, including two-factor and biometric verification, and provides a framework for dispute resolution.

Tips for Safe UPI Use

1. Don’t Share Your UPI PIN: Never share your UPI PIN with anyone and ensure to change it regularly for added security. 

1. Reject Suspicious Requests: If a transaction seems suspicious, or the amount seems incorrect, reject it and verify its legitimacy with the sender. 

1. Verify Payee Details: Always double-check the payee’s name, transaction type, and VPA to avoid errors or unauthorized payments. 

1. Avoid Interacting with Strangers: Do not share private information with strangers or respond to unsolicited requests for your PIN, CVV, OTP, or other sensitive data. 

1. Use Secure Connections: Always conduct transactions on secure websites starting with 'HTTPS://', and remember to log out after completing a transaction. 

1. Refrain from Responding to Fraudulent Messages: Ignore SMS messages with suspicious links, calls from unverified sources, or requests for personal information on social media. 

1. Beware of Fake Apps: Avoid counterfeit UPI apps by checking the app’s reviews, download numbers, and verified badges. 

1. Initiate Transactions Yourself: Only engage in transactions or phone calls that you have personally initiated to protect your account from fraud. 

1. Delete Card Details After Use: After completing a transaction, delete your card details to prevent unauthorized access. 

1. UPI PIN is Only for Sending Payments: Remember that you don’t need to enter a UPI PIN to receive money but only for making payments. 

How is UPI Different from IMPS?  

Both UPI and IMPS play pivotal roles in facilitating seamless financial transactions. But they differ in several key aspects. 

UPI Timeline

UPI's initiation, key features, and advancements are as follows: 

2016:

1. Initiation of UPI: Launched by the National Payments Corporation of India (NPCI) in partnership with the Reserve Bank of India (RBI) and the Indian Banks Association (IBA). UPI is developed as an evolution of the Immediate Payments Service (IMPS) for enhanced real-time transactions. 

1. Launch of UPI: The Unified Payments Interface (UPI) is officially launched to facilitate instant money transfers between bank accounts using a smartphone. 

2016: 

1. Introduction of IMPS: UPI is built on the framework of the Immediate Payments Service (IMPS), which was already operational for real-time transactions. 

2017: 

1. First UPI Transactions: The first UPI transactions occur as banks and merchants start adopting the new payment system. 

2018:

1. Increased Adoption: UPI gains popularity among users, leading to significant growth in transaction volumes. 

2019:

1. UPI 2.0 Announcement: NPCI announces UPI 2.0, introducing enhanced features such as one-time mandates and improved security measures, including speed checks to prevent fraud. 

2020:

1. Bill Payments Feature: UPI 2.0 integrates the Bharat Bill Payment System (BBPS) for utility bill payments. 

1. Pre-Authorized Transactions: Introduction of pre-authorised transactions to automate regular bill payments. 

1. UPI usage soared during the COVID-19 pandemic as digital payments became essential. 

2021:

1. Biometric Authentication: Announcement of plans to incorporate biometric authentication methods, such as fingerprint or iris scans, for enhanced security using Aadhaar data.  

1. Scheduled Payments Feature: UPI 2.0 introduces the ability to schedule payments, enhancing user convenience and flexibility. 

2022:

1. Aadhaar Integration: UPI 2.0 allows payments using Aadhaar numbers, linking them directly to bank accounts for seamless transactions. 

1. Introduction of UPI Lite: UPI Lite is launched to facilitate low-value transactions up to ₹200, with a maximum balance limit of ₹4,000, ideal for small-ticket purchases. 

2023:

1. Expansion of UPI: UPI continues to expand, with increasing transaction volumes and adoption across various sectors, including e-commerce and retail.  

1. Improved security: UPI’s high-level encryption and two-factor authentication (2FA), such as OTPs, enhance security while the Virtual Payment Address (VPA) simplifies transactions without sharing bank details. 

2024- present

1. Transaction Limit Increase: UPI raised transaction limits to Rs.1 lakh. A 1.1% interchange fee was introduced for transactions exceeding Rs.2,000. 

1. Inactive UPI ID Deactivation: UPI IDs that have been inactive for over a year were deactivated to enhance security.  

1. UPI-ATMs Launch: The rollout of UPI-ATMs allows cash withdrawals via QR codes. 

1. Upcoming 'Tap and Pay' Feature: A new feature enabling contactless payments is set to be introduced. Enhancements to UPI Lite facilitate offline transactions for low-value payments. 

How to Make Payments through RuPay Credit Card on UPI  

To make payments via your RuPay credit card on UPI, first link your card on the UPI app. Follow the instructions below: 

Linking RuPay Credit Card to UPI 

1. Step 1: Download a UPI app (e.g., Google Pay, PhonePe). 

1. Step 2: Select and link your bank account by entering the required code. 

1. Step 3: Choose the ‘Credit Card’ option and add your bank details. 

1. Step 4: Select your issuer bank and RuPay credit card from the list. 

1. Step 5: Confirm the card and set a UPI PIN for transactions. 

Making Payments with RuPay Credit Card on UPI 

1. Step 1: Scan the merchant's QR code or enter their UPI ID. 

1. Step 2: Choose your RuPay credit card, and enter the payment amount. 

1. Step 3: Confirm your selection and enter the UPI PIN to complete the transaction. 

How to Raise a Dispute Related to UPI Transaction  

The following are the steps to raise a dispute regarding to UPI transaction:  

1. Step 1: Open the PSP (Payment Service Provider) or TPAP (Third-Party Application Provider) app that you used to make the UPI transaction. 

1. Step 2: Select the transaction you want to dispute. 

1. Step 3: Raise the complaint within the app, providing details of the issue. 

1. Step 4: If the issue is not resolved, escalate the matter to the relevant PSP bank. 

1. Step 5: If the dispute remains unresolved, contact the Bank Ombudsman for further resolution. 

Key Participants in UPI Transactions: 

Payer App / Payment Service Provider (PSP): The app used by the sender to initiate transactions (e.g., Google Pay, PhonePe, Paytm). 

National Payments Corporation of India (NPCI): Governs UPI transactions, ensuring standardization, routing, and security. 

Issuing Bank: The bank of the sender that authorizes the transaction after verifying the sender’s credentials. 

Acquiring Bank: The receiver's bank that processes the transaction and credits the recipient’s account. 

Payee PSP: The recipient’s app that confirms the transaction and notifies the payee. 

Reasons Why a UPI Transaction May Fail 

Your UPI Transaction may fail for any of the following reasons:  

1. Bank Server Error: A brief server outage can prevent transactions from processing. Wait a moment and try again. 

1. Incorrect UPI PIN: Entering the wrong PIN will result in transaction failure. Double-check your PIN. 

1. Inaccurate Beneficiary Details: Incorrect account number or UPI ID for the beneficiary can cause failure. Ensure all details are correct. 

1. Multiple Accounts Linked to One Mobile Number: If your mobile number is linked to multiple accounts at the same bank, transactions might decline. Contact your bank for assistance. 

1. Suspicious or Unauthorized Transaction: If a transaction is flagged as suspicious, it may be declined as a fraud prevention measure. 

1. Outdated Mobile Number: Transactions may fail if your bank has not been updated with your new mobile number. Reach out to your bank. 

1. Policy Violation: Transactions that do not comply with bank policies may be rejected. Check with your bank to understand any restrictions. 

Objectives of UPI 

The objectives of UPI are as follows:  

1. Easy Recurring Payments: Facilitates simple payments for utility bills and other regular expenses. 

1. Increased Digital Payment Adoption: Aims to reduce cash transactions and promote digital payments in India. 

1. Secure Payment Interface: Provides a safe and convenient platform for recurring payments, ensuring security and ease of use. 

What is UPI 123Pay and How Does it Work? 

UPI 123Pay is a feature tailored for feature phone users. It provides them access to UPI services without the need for internet connectivity. It works through USSD (*99#) and offers multiple transaction methods, including app usage, missed calls, interactive voice response (IVR), and support from OEMs (original equipment manufacturers).  

UPI 123Pay allows instant and free-of-cost fund transfers for users, as long as their bank account is linked to their registered mobile number. This service operates round-the-clock, 365 days a year, offering convenient, internet-free transactions for feature phone users. 

Types of UPI-enabled banks are outlined in the table below:

List of UPI Enabled Banks 

The following is the list of all the banks that provide customers with the option of UPI-based fund transfers: 

List of Major UPI apps and their Respective Sponsor Banks 

Here is the list of major UPI applications and the respective banks: 

UPI Customer Care  

Here is the UPI Customer Support information in a table format: