UPI system is acclaimed to be the most popular real-time payments systems worldwide. This state-of-the-art payment interface makes person-to-person and person-to-merchant transactions in India simple, secure, and safe. According to reports from 2021, the UPI system of payments, supported by UPI bank apps, assisted in successfully completing over 39 billion financial transactions, amounting to over $940 billion in revenue, or roughly 31% of India's GDP. One of the key factors promoting the UPI industry expansion is the compatibility and simplicity of using the UPI apps.
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What is UPI?
UPI is a platform where customers can make payments through their respective bank accounts. UPI allows customers to send money to one another and make payments using mobile devices. It is an integral part of the Digital India initiative, which aims to connect all Indians electronically with each other and the Government. This payment instrument is a boon for the banking industry and has become a popular mode of payment all over India. The technology is developed by the National Payments Corporation of India (NPCI), an umbrella organization under the Reserve Bank of India (RBI). UPI is decentralized, meaning it does not require any central agency or institution to run it.
How does UPI work?
You need an internet connection and a UPI-enabled bank account to use UPI. Once you have enrolled yourself in the UPI platform, you will be able to receive money from anybody who has a valid Bank Account Number (BAN) or Mobile Number (MN). You can also send money to anybody with a valid BAN or MN on the UPI app by entering their details in the transaction screen.
Features of UPI
Instant money transfer
Use of one single application to make payments via any bank account
2 Factor Authentication
UPI id is provided to the customer for quick payments.
Use of QR codes
Quick, convenient, and safe method of payment
It helps reduce costs incurred during delivery services such as courier agencies and banks
It helps make payments without going through any intermediaries such as post offices or banks
Let's see how secure UPI is?
The application is linked to a mobile number: The first level of security is this. During login and registration, UPI verifications take place, and the app will be connected to your mobile number for verification purposes. You must once again prove your identification if you alter the phone number.
Using two factors to authenticate: The first level of security is this. During login and registration, UPI verifications take place, and the app will be connected to your mobile number for verification purposes. You must once again prove your identification if you alter the phone number.
- Signature and QR code: You may verify the legitimacy of merchants using the signed intent & rapid response code. If a business is UPI certified or not, it is simple to tell. You will receive a notification with your mobile number on it if the business is not UPI verified. This additional layer of security makes an effort to stop any fraudulent activities.
Advantages of UPI
- UPI does not require bank details for authentication or verification of the transaction.
- It can use multiple accounts for payments.
- It offers instant transfers between bank accounts, wallets, and mobile phones.
- It allows users to track transactions across all bank accounts, wallets, and mobile phones.
Outlook of UPI Payments
Reserve Bank of India and the National Payments Corporation of India are working on expanding UPI's reach. By 2025, the Reserve Bank of India anticipates payments made through UPI will account for 8% of the nation's total gross domestic product (GDP). As UPI payments are increasing, RBI plans to link credit cards with UPI to promote digital payment instruments in India. UPI transactions are free and will eventually only be a small fraction of what consumers and businesses spend to move money on private payment systems such as Mastercard and Visa. UPI was created with stringent two-factor authentication requirements for security, making it more resistant to fraud than earlier systems in wealthier nations.
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Latest Information on UPI
News
A real-time payments dispute settlement system will be made available by NPCI for the UPI ecosystem. The brand-new dispute settlement system would eliminate 80–90% of real-time payment errors. The launch of this functionality is scheduled for September 2022.
Statistic Data
The highest-ever transaction rate since 2016 was announced by UPI in July 2022, when there were 6.28 billion transactions totaling 10.62 trillion in Indian Rupees.
In March 2022, the number of transactions processed through the UPI (Unified Payments Interface) System passed a critical threshold and was on the verge of doing so again. With 84,17,572.48 crores of transactions performed on UPI during 2021–2022, the platform's transaction volume surpassed the $1 trillion barrier.
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