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What is UPI ID? Let's Learn More About It!

UPI or Unified Payment Interface is a payment system that facilitates money transfer between banks and users on their mobile phones. The service was launched in August 2016 by National Payments Corporation of India in partnership with the Indian Banks' Association, to improve the functioning of the cashless economy in India. It is an exclusive platform for financial institutions so that they can directly send and receive funds through it. Today, we will tell you more about what is UPI ID, how does it work, and why should you have one. Read on to know more!

 

 

What is UPI ID?


UPI or Unified Payments Interface is a payment system that facilitates money transfer between banks and users on their mobile phones. The service was launched in August 2016 by National Payments Corporation of India in partnership with the Indian Banks’ Association, to improve the functioning of the cashless economy in India. It is an exclusive platform for financial institutions so that they can directly send and receive funds through it. UPI is a single interface that lets you send money to anyone in India using registered mobile numbers. This service is available in over 25 Indian languages and available across all mobile phone networks. UPI ID enables you to sign in to your UPI-enabled payment app or website and authorise your bank account or transfer money to another user.

 

How does UPI works?


UPI is a mobile app-based financial service that works with any bank account or virtual bank account registered with the app. You can link your UPI app or website with your bank account to send money to anyone’s bank account or mobile number. You can also directly transfer money to other UPI users by entering their bank account or mobile number. There are many ways to do UPI transactions. You can do the transactions either through mobile app or website. You can also do UPI transactions by using social media accounts like WhatsApp, Facebook, and Google. You can also do UPI transactions using text messages. You can transfer money to the desired person’s account by entering the account number, account name, and amount. There are many UPI apps available in the market. You can choose the UPI app that is most suitable for you.

 

Why you should have UPI ID?


UPPI gives you the ability to send and receive money from anyone that has your bank account or mobile number registered with their app. It is important to have UPI ID not just for sending or receiving money, but also to activate Interchange Rate (IR) mode on your mobile wallet. In IR mode, your mobile wallet gets notified when you buy or sell goods through your mobile wallet. So, you don’t need to worry about losing your money if you lose your mobile phone or if it gets stolen. Your mobile wallet will automatically detect the loss and alert the bank account of the same mobile number. To get a UPI ID, you will first have to link your bank account with the app. Then, you will have to register your mobile number with the app. This is similar to registering a new number in your mobile phone. Once this is done, you will have a UPI ID. You can use this ID to register for UPI apps and transfer money.

 

How to Create UPI ID?


In order to get a UPI ID for your bank account, you will have to log in to your UPI app. Next, you will have to select “Add a New UPI ID” from the menu. You can create multiple UPI IDs, which are valid across different UPI apps.

 

Benefits of UPI ID


- You can transfer money to anyone with a UPI ID registered with your bank account. - You can also receive money to your UPI account using a UPI ID.

 - Your UPI account is linked to all your bank accounts.

- If your mobile phone gets lost or stolen, your UPI account gets automatically activated.

- You can create multiple UPI IDs across different apps.

- You can activate IR mode on your mobile wallet using UPI ID.

 

Limitations of UPI ID


- You can’t receive money if your bank account has no fund.

- You can only register one UPI ID per mobile number.

 - You can’t transfer money to someone who has a pending IR-mode activation on their mobile wallet.

- You can’t transfer money from your mobile wallet to UPI apps.

- You can’t send and receive money from your UPI account during the same transaction.

- You can’t use your UPI ID for cashback or rewards.

 

Conclusion


UPI is a payment system that enables you to send and receive money using your mobile phone number. You can register your bank account or virtual account with UPI apps to get a UPI ID and start transacting money. UPI ID gives you the ability to receive money from anyone and send money to anyone’s bank account. It also enables you to create multiple UPI IDs, which are valid across different UPI apps. UPI ID also provides benefits like no need to carry physical money and it is also protected from theft.

 

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