I want to know about UPI and how I could use it. Please explain.
Devika Kamath, Bangalore
UPI is the Unified Payment Interface (UPI), which is an identity needed for your money and is a unique identifier that your bank uses to transfer money and make payments using the IMPS (Immediate Payments Service). Right now if you make a bank payment online, you have to enter the account number of the person you are transferring the money to, account type, Bank name and the IFSC code. Even if you have all these details, typing it all in, particularly on a phone, is a painful process. Moreover, many banks take up to 12 hours to add a new payee and only then you can make the transfer.
UPI does away with all this friction. The interface allows account holders across banks to send and receive money from their Smartphones using just their Aadhaar unique identity number, mobile phone number or virtual payments address without entering bank account details.
If your bank is UPI-enabled, you can ask it to connect you to the system. To initiate a transaction, you can use two types of address—global or local. Global address includes your mobile, Aadhaar and bank account numbers. A local address can be a virtual address. Let’s say your bank gives you a virtual ID similar to your email ID (for instance, name@companyname). This virtual address will allow you to send and receive money from multiple banks and prepaid payment issuers.
So, you will no longer need to use a particular app to send and receive money. For example, if you use a taxi service, at the end of the journey you just have to give your virtual address and the driver will request money from it. You will get a message on your mobile phone asking for authentication. Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require either the driver or you to share bank details. Since UPI runs on IMPS, the service will be available real time and 24X7.
