What is UPI?
UPI is an online payments solution which facilitate the transfer of funds instantly between person and person smart phone. It can be used both to send and receive funds.
What is its Umbrella Organisation?
NPCI – National Payment Corporation of India is its umbrella Organisation. It was set up with the guidance and support of the RBI and IBA ( Indian Bank’s Association).
It was launched by whom?
How it Works?
Popular online payment services like NEFT, RTGS, IMPS require a customer to register on the bank’s website, add beneficiary and share details of bank accounts. Whereas in UPI a user just needs to download the UPI app (offered by 29 banks) from the Google Play Store. Register this app on android phones. It will ask you to make a virtual address. The good thing is you can create as many as virtual address on UPI.
Is there any limit for funds?
Yes, one can send or receive funds up to rupees 1 lakh to or from another person or establishment (like company) after a request from a person on the leg of the transaction who too has unique virtual address or ID.
What is the difference between NEFT/RTGS/IMPS and UPI?
In UPI bank account details are not shared in transactions as in NEFT/IMPS.
In UPI transactions can be made 24X7 all year around, whereas NEFT/RTGS can not be done on Sunday or holidays and IMPS needs IFS code every time you use it.
With UPI app of one bank you can handle other bank’s transactions also.
Banks are allowed to charge for each transactions, but they haven’t started doing so yet.
How UPI will change the scenario of Indian Banking Transaction System?
1. It will pave the way to cashless economy.
2. Hassle-less transactions through phones will cover the gap between banks and customers.
3. It will lower Tax Evasion.
With the growing use of smartphones in India and the number of mobile phone subscribers a large number of transaction are expected to be carried out through phones or electronically. This is already reflected in the rising number of transactions through the electronic mode rather than by cheques.