how unified payments interface upi works
the unified payments interface is a real time payment system it is designed to enable peer to peer inter bank transfers through a single two click factor authentication process the interface is regulated by the reserve bank of india rbi india s central bank it works by transferring money between two bank accounts along with a mobile platform the system is said to be a safe and secure method of transferring money between two parties and eliminates the need to transact with physical cash or through a bank the pilot system was launched in india on april 11 2016 banks across the country started to upload their interface in aug 2016 upi uses existing systems such as immediate payment service imps and aadhaar enabled payment system aeps to ensure seamless settlement across accounts it facilitates push pay and pull receive transactions and even works for over the counter or barcode payments as well as for multiple recurring payments such as utility bills school fees and other subscriptions in 2021 940 billion was transacted over upi and in 2022 the average monthly transaction count was more than six billion once a single identifier is established the system allows mobile payments to be delivered without the use of credit or debit cards net banking or any need to enter account details this would not just ensure greater safety of sensitive information but connect people who have bank accounts via smartphones to carry out hassle free transactions overall upi implies fewer cash transactions and potentially reduces the unbanked population sending money vs receiving moneysending money on the upi is called a push in order to send money the user logs into the interface and selects the send money payment option after entering the recipient s virtual id and the amount desired they choose the account from which the money will be debited the user then enters a special personal identification number pin and receives a confirmation receiving money through the system is called a pull once the user has logged in to the system they select the option to collect money the user then needs to enter the virtual id for the remitter the amount to be collected and the account in which they will deposit the funds a message then goes to the payer with the request to pay if they decide to make the payment they enter their upi pin to authorize the transaction once the transfer has been completed both the sender and the recipient receive a confirmation by text message to their smartphones services offered by upia number of key features are offered by upi users can access balances and transaction histories along with sending and receiving money to send money users need an account number the indian financial system code or ifsc which is an alphanumeric code that facilitates electronic transfers the mobile number of the recipient and a virtual id or aadhaar number which is like a social security number 