Unified Payments Interface (UPI)
What Is UPI?
Unified Payments Interface (UPI) is India's very own real-time payment system, allowing the processing of instant inter-bank transfers between domestic Indian bank accounts. Introduced in 2016, UBI is owned and maintained by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI.)
As of October 2019, UPI had recorded the processing of one billion transactions to date for around 100 million users. As of June 2021, the system was used by 224 Indian banks of all sizes, either via their own UPI apps or through partnerships with third-party UPI apps.
UPI is a mobile-based inter-bank payment system. This means that UPI allows users to send and receive money between bank accounts using a mobile application geared toward routing funds and merchant payments in real-time through a centralised payments infrastructure (hence Unified Payments Interface.)
The adoption of UPI in 2016 had several major impacts on the Indian payments sector and benefited merchants, banks, and consumers in many ways. Several of these benefits include:
- Sensitivity: Banking details and sensitive financial information no longer need to be inserted to instruct a transaction;
- Accessibility: Over-the-counter barcode payments, online payments, and mobile payments are facilitated;
- Recurring Costs: Pre-authorized recurring payments (e.g. for utility bills, cellular contracts, etc.) are facilitated;
- In-App PIN: Individual UPI PINs can be used to send ("Push") and receive ("Pull") money;
- Flexibility: Either a bank account number, IFSC code, mobile phone number, or Aadhaar number can also be used to send UPI payments;
- Availability: UPI payments are available and accessible all year round.
Many Indian banks have developed their own mobile apps for UPI payments, while others use third-party UPI mobile applications. Some of the more popular UPI include the following:
Axis Bank, HDFC Bank, ICICI Bank, SBI
Axis Bank, HDFC Bank, ICICI Bank, SBI
Jio Payments Bank
UPI Payment Charges
As of June 2021, no charges are associated with using UPI, and the system remains free to use in all Indian banks and UPI mobile apps.
UPI for International Money Transfers
UPI is only available to Indian bank account holders, and therefore it's not possible to transfer money via UPI into a foreign bank account. However, the payment system is available for international money transfers from India via several third-party operators, most notably Wise, which introduced the service in June 2021.
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Frequently Asked Questions About UPI
Are UPI transactions safe? 🔐
Yes, UPI transactions are very safe. Not only are they processed through the existing immediate payment systems infrastructure of Indian banks, but the UPI technology itself is owned and maintained by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI.)
Can a UPI transaction be reversed? ⏮
Yes, but only if the payment is declined on the merchant or receiver side. In these cases, UPI processes real-time payment reversals.
Are UPI transactions free? 💲
Yes, UPI transactions are free and come at no cost to consumers.
Are UPI transactions chargeable? 🧾
No. As of June 2021, no charges are associated with using UPI, and the system remains free to use in all Indian banks and UPI mobile apps.
Can a UPI PIN be changed? 🔢
Yes, some UPI apps will allow you to change your UPI pin in the app itself.
When did UPI start? 📆
UPI was introduced in 2016 and has since grown to include more than 100 million users across more than 200 Indian banks.
Other Popular Money Transfer Definitions
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