“It is said that the launch of UPI will prove to be a milestone in the transformation of modern India”

If you are not clear about what is unified payment interface(UPI) and how does it work, then this the place for you. This article will provide a brief knowledge of UPI, the technology behind it and how you can make use of it.

Unified payment interface (UPI), a new age of payment system introduced in India by National Payment Corporation of India. it is a real-time interbank payment system. It is a system that powers multiple bank accounts into a single mobile application with the contribution of banks which are participating. In this system there is a merge system of various banking features, seamless fund routing & merchant payments, this system is a modern technology that can well perform in mobiles tablet etc.

The invention is to make the human effortless regarding payments. It is a convenient system that could be used as per requirements. UPI works on the concept of a virtual payment address. Virtual payment address (VPA) is an identifier that is used to uniquely verify an individual account. UPI enables the customers to make any number of VPAs to do payment and receiving payments. UPI enables all bank account holders to instantaneously transfer funds across different banks using mobile phones. The service is available 24*7 to ensure the best experience.

UPI has made e-commerce transaction easier, and facilitate micropayments and peer-to-peer payments. Bank accounts, cards and wallets can be mapped to a unique virtual payment address.UPI is now a need of era in terms of ease, Customer satisfaction and cost-efficiency. It also ensures security and has witnessed good reviews from people currently using it. It is a mobile-centric system that is been used all across the nation and even planning to spread it in other countries too.

UPI is currently in the initial building state and new advancements is been added to enhance the already existing features. Due to this, it could adopt great user adoption. It also helps a huge group of people to admit under the digital system that would serve as a great achievement in Indian financial inclusion as India has the 7th largest economy in the world with GDP of USD 2.3 trillion thus if dependent on cash then would bring a huge chance of a set of problems of production, storage and cash management, cost of currency notes, use of fake currency and most importantly lack of trail of transactions which leads to tax evasion.

 UPI uses One-click 2-factor authentication for safe and secure payments using a personal mobile phone without the need for any separate acquiring de-vices or physical tokens. UPI enables both real-time pushes and pulls transactions using a mobile phone. For use of UPI to need not share the details with another person which is a good idea to ensure safety to our confidential details.

The technology behind UPI:

UPI working system is based on a common layer of a unified interface as developed by NPCI. This common layer orchestrates transactions and ensures settlement across bank accounts using IMPS and Aadhaar Enabled Payment System (AEPS). UPI is built upon the IMPS technology this unable the user to transfer many from one account to another account through UPI Virtual Address (unique ID generated by the bank) or by using their Bank Account Number and IFS Code. UPI was launched on 25th August, 2016 and that far got the eyes of many people. currently, there are 39 apps live on Google Play Store and 50+ issuing banks supporting UPI.

How to use UPI?

Firstly, there is a procedure for registration in which you need to fill an application. Steps for Registration:

The User needs to download the UPI application from the App Store/Banks website. After that, the user needs to create his/her profile with filling up details like name virtual id (payment address), password etc.  The User goes to “Add/Link/Manage Bank Account” option and links the bank and account number with the virtual id. Soon after that User selects the bank account from which he/she wants to initiate the transaction User clicks one of the options.

The user receives OTP from the Issuer bank on his/her registered mobile number. Some card details like number and expiry date needed to be filled. Enter the provided OTP when the message pops up. After clicking submit, the customer gets a notification. The message says the registration is completed in a pre-formatted form.

There are fundamental to proceed to do using UPI:

1.       Performing a UPI Transaction: In this, we send money to some for this user log in UPI application. After the successful login, you can select the option to send money.  some details needed to be entered and then select the amount you need to send. Pop up message in screen will ask you to confirm and submit. The User now enters UPI PIN. Then the successful message arrives on the screen

  • PULLRequestingmoney: In this user is requesting or accepting money coming from another person. Login in UPI application is performed. After a successful login, the user selects the option to collect money (payment request). The User enters remitters/payers virtual id, amount and account to be credited. confirmation screen to review the payment details. Confirming by clicking the button. Payer will get the notification on his mobile for request money.  clicks on the notification by the payer and opens he opens the banks UPI app where he reviews payment request. He would see two option to accept or decline. In case of accept payment, the payer will enter UPI PIN to authorize the transaction. Transaction complete, payer gets successful or decline transaction notification Payee/requester gets notification and SMS from the bank for credit of his bank account.

 Several factors have worked to make UPI a success as of many people are making use of it to do their payments.it is an electronic payment that serves to facilitate the transition to a cashless economy. There is a unique identifier for each user so that there is no confusion or any problem with a security concern. Also, it is time convenient thus when and where the transaction or request can be successfully performed. UPI ecosystem built and integrated for provisioning services. The transaction speed is higher and done in minutes. Customer confidence in the service, market trust and faster adoption by the customer. There are a set of rules decided that is followed in any case to ensure Regulatory compliance.UPI provides financial and reputational aspects. The secure design is under improvement to provide a better experience. UPI saves that pain and creates an excellent customer experience.


UPI is a great step to make our economy cashless that could secure us from many threats and even cashless payments faster, smoother and easier. The launch of UPI will prove to be a milestone if supported by each of us. It is all set to become an efficient alternative to mobile wallets. UPI is as secure as any other online bank transaction.

The money transfer requires two-factor authentication. First, to login into the app the user has to create an authentication. It can be either a PIN or touch id. Second, to finally transfer the money the user has to enter their UPI pin. Currently, the transactions made via UPI are free to the end customers.


About the Author

BankReed Admin

Banking Professional with 16 Years of Experience. The idea to start this Blogging Site is to Create Awareness about the Banking and Financial Services.

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