With the current changes in the currency policies, the Indian channel partners should adopt digital payment methods partnering with many cashless transaction enablers. National Payments Corporation of India has been at the forefront of several innovations. One of such innovation is Unified Payments Interface.
Unified Payments Interface (UPI) is a simple and effective way to transfer money between two bank accounts in India by using a smartphone. UPI is built on IMPS and allows you to transfer money between two bank accounts by using a unique identifier like an email address – usually known as VPA – Virtual Payment Address without the need to know the account number and IFSC details of beneficiary.
While there are various ways to perform digital money-transfer including but not limited to NEFT, RTGS, Wallets, NFCs – UPI is built on top of IMPS (which operates 24×7) and has been adopted by majority of Banks in India.
UPI simplifies money transfer by masking the need to know the destination bank account details such as account number and IFSC details.The can be both sender (payer) and receiver (payee) initiated and are carried out in a secure, convenient, and integrated fashion
You do not have to remember bank account details or to keep your wallets topped up. The money that remains in your account earns interest and on need basis you may transfer funds simply and securely. With the Prime Minister of India taking the right steps to reduce the use of unaccounted money kept as cash by demonetising, honest citizens may start to use UPI NOW to avoid the need to use cash. Further, unlike other solutions, the money resides in the bank account and continues to earn interest.
VPA or Virtual Payment Address uniquely links the identity of account holder with his / her bank account. Typically, VPA has a format like <chosenname>@<BankName>. For example, the authors’ UPI VPA ID is digital@cnrb – digital is the chosen name and cnrb is the Canara Bank UPI VPA suffix.
With VPA, there is no need for you to share private and confidential information like mobile number, bank account number and IFSC details. You need to have Smartphone with data connectivity. You must also have your mobile number registered with your bank and should be able to receive SMS from your bank on this number. Your account need to be enabled for mobile banking / SMS alerts to use UPI. UPI allows for a mobile phone to be transformed into a POS device for merchants. This will democratize payment collection systems for even the smallest of merchants. Can service customers not having cards, Small value transactions can be initiated as a PULL, Ideal for mobile and E-Commerce.