Upi Project
Upi Project
Upi Project
The Digital India program is a flagship agenda of the Government of India with vision to
transform India into a digitally empowered society and a knowledge economy. “Faceless,
Paperless, Cashless is one of the professed role of Digital India. It is created to deploy
various digital services across the country, it is necessary to create a strong digital
infrastructure.
UPI
Background
Prior to 2016, India used a number of different systems to transfer money between
banks. The traditional forms included RTGS, IMPS and NEFT. With the plethora of
systems, rules and growing paper burden, there was a need for a unified system that
could automate and standardise India’s payment platforms. In 2016, NPCI set out
with a mandate to change the face of India’s payment systems. It developed the
Unified Payments Interface (UPI) as an architecture framework with a set of standard
Application Programming Interface (API) specifications to facilitate online payments.
The aim was to simplify and provide a single interface across all NPCI systems,
thereby creating interoperability and a superior customer experience. The pilot
program, with 21 member banks, was launched on 11th April, 2016, by Dr.Raghuram
G. Rajan, Governor, RBI, in Mumbai. From 25th August, 2016, a growing number of
banks started to upload their UPI enabled apps to the Google Play store.
Introduction
The Unified Payments Interface (UPI) is a revolutionary, user-friendly, real time
payment solution that facilitates inter-bank transactions, and enables greater digital
payments adoption in the country. Developed and launched by the National
Payments Corporation of India (NPCI)—a Reserve Bank of India regulated
organisation—launched the United Payment Interface (UPI) payment system in India
in 2016. UPI is a smartphone based feature that facilitate easy and instant inter-bank
fund transfer. The key highlight of the UPI that a single mobile application can be
easily used to access different bank accounts. It uses the unique virtual ID provided
by banks, also known as Virtual Payment Address (VPA) for all digital transactions,
including payments and funds transfer. The UPI uses the existing Immediate
Payment Service (IMPS) infrastructure—used by net banking—for instant transfer of
funds.
UPI’s core function is to support easy and secure money transfers between bank
accounts. It does this by adding multiple bank accounts into a single mobile
application, allowing for seamless fund transfers and merchant payments from one
place. It also enables ‘peer to peer’ and ‘peer to merchant’ collection requests, which
can be scheduled and paid as requested.
Payments can be made using a UPI ID, UPI Number, Account number, and an Indian
Financial System Code (IFSC). Payment security is as per applicable RBI guidelines
using a 1-click 2-factor authentication where the second factor of authentication is
the UPI PIN. UPI is also available through the Unstructured Supplementary Services
Data (USSD) channel to enable UPI members to cater to users of feature phones.
How To Register in UPI.
To use UPI as a payment mode, one has to sign-up for the service through a UPI
app. This can be done on mobile banking of your particular bank or a third-party
UPI app. Steps are
1. You need to have a smartphone and internet facility to use it.
2. User downloads the UPI application from the App Store/Banks website.
3. Scroll to the ‘Bank Account’ section on the app. This section shows all the bank
accounts linked with this particular app.
4. Select the bank account for which you want to set a UPI PIN. You will see a ‘SET’
option in case you have never set a UPI PIN for the bank account
5. Enter the ‘Last six digits’ and ‘Expiry date’ of your Debit/ATM card
6. Now, you will receive an OTP from your bank on the registered mobile number. In
the next screen, enter the OTP and the UPI PIN you want to set for the account
and click ‘submit’
7. You will receive a congratulatory message on the successful generation of UPI PIN.
After this, you can send money, make payments from your bank account directly by
authenticating using your UPI PIN.
B. For Banks
A safe and secure transaction system
Seamless merchant transaction
Use of the existing infrastructure ensures no additional cost is incurred by the
bank
Single-click with two-factor authentication
C. For Merchants
Seamless fund collection
Instant receipt of fund
No need for sharing bank details
No additional or operating cost as opposed to PoS machines
Suitable for e-commerce platforms
COD collection made easy with UPI payment
Participants in UPI
Payer PSP
Member bank as a Payer PSP can onboard a customer into a UPI app, allowing the
customer to register for UPI services and provide options to approve a financial
transaction or non-financial request wherever necessary
Payee PSP
A bank in the role of Payee PSP can onboard a customer/merchant to receive money
or raise a collect request. This is also known as a beneficiary/resolving PSP.
Remitter Bank
All UPI users need to have a banking account with a UPI enabled bank. While
performing a transaction, the user’s bank account will be debited. The remitting bank
also holds the responsibility of authenticating the UPI PIN set by the customer.
Beneficiary Bank
Any credit going to a UPI user will be credited to a beneficiary’s bank account. The
bank receiving the funds in UPI transactions will be acting as a beneficiary bank.
NPCI
NPCI is the owner, network operator, service provider, and coordinator of the UPI
Network.
Merchants
Participating merchants are those who are on-boarded by their banks to
accept UPI enabled payments from customers
UPI APPS
WHAT IS A DIGITAL WALLET?
An electronic device or online service that allows an individual to make electronic transactions is called a digital
wallet. An individual`s bank account can also be linked to the digital wallet. One in five customers in Asia are now
using a digital wallet. Some of the popular digital wallets are Paytm, Freecharge, Mobikwik, Oxigen, mRuppee,
Airtel Money, Jio Money, SBI Buddy, itz Cash, Citrus Pay, Vodafone M-Pesa, Axis Bank Lime, ICICI Pockets,
SpeedPay, PhonePe, etc.
A. Paytm - It is an Indian e-commerce operator and Financial Technology company. Paytm was founded in
August 2010 by its founder Mr. Vijay Shekhar Sharma. In 2014, the company launched its first Digital E-wallet
known as Paytm Wallet. Paytm offers Digital wallet payment, mobile payments, online shopping, Paytm
Payments Bank etc.
Paytm is known as a digital payment system which allows you to transfer money through your debit/credit
cards and which also allows you to do online banking. Once you register to Paytm you can make online
payment of bills or you can make payment through you paytm wallet by first adding money into your
wallet
B. Google Pay - It also known as G Pay or Pay with Google it is also one type of Digital Wallet and online
payment system developed by Google. The services of Android Pay and Google wallet merged in January
2018 and the name was changed to Google Pay. On September 2017, Google launched an UPI-based app
known as TEZ in India which was later rebranded as Google Pay. Google pay has more than 25 million active
users in a month of the digital wallets in India.
C. PhonePe - It is an Indian e-commerce payment service and digital wallet company. It was founded in the
year 2015 by its founders, Mr. Sameer Nigam and Rahul Chari and it was the first payment app in India which
was built on Unified Payments Interface i.e (UPI). It offers various services such as:- i. User can send or
receive money through Phone Pe app.
ii. User can make various payment- mobile recharges, DTH recharges, users
can also make payments of shopping online on various apps.
iii. Phone Pe even allows users to book tickets through various apps.
Phone Pe app has more than 100 million users and it has crossed more than 5 billion transactions.
D. Mobikwik - MobiKwik is also another Indian company app which acts as a digital wallet, as a mobile
payments system and was founded by Bipin Singh and Upasana Taku in the year 2009. Initially it was just a
website with closed wallet facility but later started with mobile apps. In the year 2016 it launched -Mobikwik
Lite app which was for older 2G mobile networks and those with poor network connectivity. It has also
launched its first ever Mobile Wallet system in the year 2012.
E. YONO by SBI - The word YONO means You Only Need One, this app helps users to access various
financial and other services, it acts as a Digital Banking platform which offers various services such as online
shopping payments, booking tickets of (train, bus, taxi, flights), it also allows customers to make medical bill
payments. YONO app was launched in the year 2017 by Mr. Arun Jaitley, the then Finance Minister of India.
This app can also be used by customers to make ATM withdrawals as well as this app can be used to make
various fund transfers, etc. Through YONO app a customer can track his/her OD account balance, can even
open fixed deposit, recurring deposits, and can even invest in mutual funds. Customers can even track their
loans through this app.
ADVANTAGES OF UPI
Here are some of the best benefits of using UPI
1. Secure payment
The first advantage of UPI payment is security. You can perform the safest transaction possible by
using the Unified Payments Interface (UPI) without ever disclosing your UPI PIN. This method of
transferring funds is extremely secure because it only requires you to remember one PIN.
2. 24 x 7 availability
With UPI, mobile phone users may send and receive money instantly. 24X7.
3. Convenience
The ease of use is one of the most appealing features of UPI for consumers. Only with a few clicks,
a transaction can be finalized in a matter of seconds. You can forget about bringing cash with you or
making a trip to the bank.
4. Zero charges
All UPI payments are free of charge and you can conduct monetary transactions at no cost. Whereas
similar payments made through IMPS or NEFT incur a small fee, UPI transactions are tax-free. You
can conduct monetary transactions at no cost to you.
5. Simple interface
With the assistance of the UPI payment, sending money to another person’s bank account is a
breeze. To send money to another UPI user, all you need is their UPI id, which you can get by
asking them for their UPI pin, and the amount, both of which you may enter into the UPI support
app.
The major benefit of the UPI is that you can send or request any payment at once. In a matter of
seconds, the funds will be deposited into your account or transferred to another.
Almost every financial institution can work with UPI. SBI, PNB and any other bank that supports
the Unified Payments Interface can receive payments quickly, simply, and at no cost.
The UPI payment is straightforward and accurate, but it does come with a few drawbacks that we
have detailed below for your information.
2. Dependency on smartphones
In order to complete a UPI transaction, the user must have access to both a smart phone and the
internet. This can be problematic for those who do not have access to smart phones or the internet.
Furthermore, customers may experience issues using their UPI accounts & completing transactions
if they lose or damage their phones.
3. Server issue
While UPI is a speedy and secure method of payment, it can take a while to process after a server
outage at the receiving bank.
Like any other software, UPI systems might have downtime or technical issues. Online customers
may become irritated if tech maintenance is performed without warning or during peak shopping
hours.
5. Online fraud
Cyber criminals are adapting to the growing trend of individuals making and preferring online
payments over more conventional ones.
More and more people fall victim to identity theft, phishing scams, and database breaches.
Businesses spend a lot of money on payment-security software to protect themselves from these
threats and boost security.
Thus, never share your UPI pin with anyone, this can keep you secure and protect against online
fraud.
6. Technological illiteracy
The fact that many people, particularly the elderly, are technologically illiterate is a major drawback
to UPI online payment systems. They don’t feel confident making purchases online due to a lack of
understanding on how to use technology or devices.
Many people avoid using electronic payment systems because they find them too complicated. This
is particularly problematic in economies in transition, such as India’s.
What Is the Maximum Limit of UPI Transaction?
UPI Lite
Users can do low-value transactions through UPI Lite. This service allows
customers to make transactions below Rs. 200. You can simply activate UPI Lite
wallet in your UPI app namely BHIM, Paytm, PhonePe, etc. Customers can easily
make payments from this wallet and it requires just one click. Users do not
require to authenticate their transaction with UPI PIN in this facility. The service
will reduce the load from the core banking system, thereby, making UPI
transactions faster.
Here’s a list of all the countries that have adopted UPI to date:
Country Accepted
Malaysia 2021
Bahrain –
Conclusion
In general, UPI has changed the way of money transfer in India
by making it safer and cheaper than previous approaches. The
use of UPI has many advantages as mentioned above.
UPI Payments are changing the way we send and receive money,
reducing dependence on bank systems. It has simplified
transactions, made them more secure, and made them easier.
Using NCPI’s UPI, you can make hassle-free, cashless
payments, and it’s relatively simple.
If you regularly use your online banking facility, you may find
the UPI application useful for sending and receiving money
online.
BIBLIOGRAPHY
A. Google.com
B. Demandsage
C. Easebuzz
D. PaisaBazzar
E. NPCI.org
F. Academic.eud
G. Linkedin