Unified payments interface popularly called UPI, has been launched by National Payments Corporation of India (NPCI). Using UPI you can pay different merchants, directly from your bank account, without the headache of typing credit card details, IFSC code or having to remember net banking or mobile wallet passwords.
UPI is a very cheap way of transferring money to friends and family. The fees for the fund transfer through the UPI are less than 50 paise. NEFT charges INR 2.5 for a transfer. The IMPS charges a minimum of INR 5.
Many of our citizens do not prefer online transactions and card payments because it asks for the bank details, which makes the process tedious. For net banking you must give your bank details such as IFSC code and bank account number and for card transactions you are required to give card number, validity period and CVV number. For this reasons people still prefer cash transactions. Now, UPI has become a solution for this problem. You don’t require card and bank details for making transactions through UPI. You just have to provide virtual payment address.
There are many modes of transactions such as, card payment, net banking and mobile wallet, which can help you to decrease cash transactions. But, you cannot always use net banking and card transactions for small payments, as it is not feasible for the consumers as well as the shopkeeper. UPI makes small transactions feasible for both the small shopkeeper and the consumer.
Many citizens do not use online transactions and card payments, because of safety concerns. Now UPI has helped to minimize this problem. UPI is safer than net banking and card payments. While transacting through UPI you don’t have to share your bank account details, card number and CVV. Authentication also takes place at the level of your Smartphone.
UPI is very fast as it is based on the IMPS platform. You can transfer money instantly without any hassle. You can make payment 24*7 even on holidays. This makes UPI a great way to pay your shopkeeper.
In case of online fund transfer, registration of the new payee takes half an hour to 24 hours. But, registration on UPI doesn’t take much time.
You don’t need different UPI apps for different bank accounts. You can link many bank accounts to one UPI app. As you can link multiple bank accounts to one UPI app, you can pay using any bank account you wish.
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Under : Financial Planning