How Does UPI Work and Things to Consider When Using UPI Payment App

Nowadays most of the people are making their money transactions through digital way. The digital transactions include our conventional internet banking platform, digital wallets like Paytm or Google Pay and mobile banking apps provided by banks. UPI payment is the newest in this category and let us discuss how UPI work.

What is UPI Payment?

UPI or Unified Payment Interface is the latest in the digital money transaction system introduced by the National Payment Corporation of India (NPCI). It is controlled by Reserve Bank Of India (RBI ) and Indian Banks Association (IBA).

This transaction can be done through a UPI payment app developed by NPCI or through individual UPI app by different banks.

This payment system enables its user to do instantaneous money transactions between two banks. This payment concept allows adding multiple bank accounts in a single mobile platform.

UPI Payment app

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How does UPI work?

All the transactions in the UPI payment system are based on a Virtual Payment Address (VPA). It is nothing more than similar to our e-mail ID. In UPI payment system user has to create a VPA and it should be linked with their bank account.

Creation and linking of VPA is a one time process and this virtual address is your payment ID for all transactions through UPI system.No need to remember account number, IFSC code, and other internet banking credentials. You are sending or receiving money between two Virtual Payment addresses only.

Is UPI Payment is Secure?

As per the latest information, UPI payment system is as much as secure as the normal internet banking system. As mentioned earlier it is under the control if NPCI who is controlling interbank transactions in India.

We already explained the security steps involved in UPI payment on  ‘ How does UPI work ‘ section.

Moreover, UPI payment system is based on single-click two-factor authentication. In two factor authentication, first is protected by the Virtual ID and second is MPIN which is similar to OTP.

How can Use UPI payment system?

We have already seen how does UPI work.

For doing UPI transaction you have to install and activate a UPI Payment app in your smartphone. There are plenty of UPI payment apps are available which includes BHIM UPI app from NPCI itself.

Also, there are almost all banks have their own UPI app which can be downloaded from their website or application stores such as Google Playstore or Apple App store.

Alternatively, you can use UPI apps from digital wallets such as Paytm, Freecharge, etc.

Once the application is installed, the basic set up or UPI registration is almost the same in all apps even though there are changes in interfaces.

These changes are easily available on your bank’s website.

The main thing in UPI registration involves the creation of a Virtual ID. This is similar to the format [email protected] You will get the option to create a virtual ID in the UPI app or banks’ mobile app itself.

Once you created your Virtual UPI ID and linking of your bank you are ready to UPI transaction.

UPI transaction Charge and Transaction Limit

Normally UPI transaction limit is Rs.1 Lakh per day per transaction on almost all apps.

As of now, there are no UPI transaction charges imposed and that there will be a nominal charge shortly.

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Things to be taken care while doing UPI Payment

The important feature of UPI  payment system is that it is very easy to make transactions at any time through mobile phone apps. But somehow we have to take care of certain things while using this system.

The Unified Payment Interface (UPI) is one of the most powerful payments transactions in the country.

We have already understood how does UPI work. The following are some of the ways you can make your digital payments safer

1. Do not give the password  to anyone:

We think the matter is very clear from the heading words itself. After all, we’ve all been using passwords for years?

Often we may write these passwords on a paper to remember it easily or there may be chances to share it with someone we trust in a public place. But, these are harmless ways to get out your password.

Do not exchange your password or PIN with anyone. For those who fear having forgotten the password, use a password manager, and never write it down.

2. Keep your PIN as personal:

We use PIN or personal identification numbers to verify our identity. We also use the PIN to prevent someone else from using our phones. Digital payment applications like Google Pay also require a PIN. It has two-factor authentication to verify your identity before allowing you to access this app.

Therefore, don’t share the mobile PIN or UPI Pin with anyone, even with people you trust or who claim to be a Customer Care Representative, because this will make the information on your phone and apps public.

3. Recheck the amount when you are doing transactions.

It is difficult to remember many transactions when we make more payments online. When you use the UPI app to purchase goods, you will receive a collection request and the payment will be completed only if you approve it.

You cannot make money through UPI app without your authorization. Therefore, when receiving the payment request, verify them clearly and confirm the amount of that transaction and then only approve it.

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4. Always keep the exact customer care number:

If something goes wrong with your digital payment, you will need to share it with someone authenticated to solve. In such cases, simply call the official number provided on your payment application’s official social media channels or website.

If you are seeking a solution on an incorrect number, it may guide you to a more problematic condition. Most of the UPI payments apps provide 24-hour customer service.

5.Reject Payment Collect Request from Strangers:

Sometimes, a stranger may send payment collect requests to your UPI ID. This can be confusing. If you are not familiar with the request sender, please refuse the request.

Apps like Google Pay usually provide a ‘scam’ warning to remind you if that person isn’t on your contact list.

Read this warning messages and act carefully.

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