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What Is UPI? How It Works Internally?

You have definitely heard the term UPI. At the time of demonetization most of the time, you hear the word UPI. At this generation, most of the people do the digital payment but they don’t know about what is UPI? How can we do a UPI payment?

At the time of demonetization cashless payment was accepted and many of the people use the cashless payment. To make a cashless payment more secure, people start making use of Apps.

In today’s generation cashless payment is one of the best options to make payments online.

If you don’t know about the online payment you can go through this article what is online payment ?

To make India digital and to encourage digital payments, a new technology system was introduced which is UPI payment.

So let’s discuss first what is UPI ?

What Is UPI?

The full form of a UPI is a Unified Payment Service. Actually the UPI is a payment system technology, it makes the cashless payment very easy and fast. UPI payment is very easy and secure for doing the cashless payment.

Reserve Bank of India (RBI) and Indian Bank Association (IBM) has made the NPCI means (National Payment Corporation Of India ) together who manages the banking system In India.

UPI is the latest technology. With the help of UPI, you can send or receive money. At first sending or receiving the money you have to give much information like bank name, bank account number, bank IFSC code, and many more.

But when UPI comes you don’t need to give this much information. You have to give only your UPI ID. So that you can easily send or receive money.

By using UPI payment you can make a transaction of a maximum ₹1 Lakh at a time. This UPI payment has made by considering the smartphone user. So that you can use UPI payment in your smartphone also.

How To Use UPI?

  • Firstly to use UPI you have to install the apps that support UPI in your android phone.
  • There are many banks applications are available that supports the UPI. For example Andhra Bank, Axis Bank, ICICI Bank, etc.
  • You have to go to your google play store and download the UPI app for the bank in which you have an account.
  • After installing the app sign in to the app and create an account on the app by giving you the details of your bank account.
  • After that you will find a virtual ID, now you can generate your ID.
  • The ID can be anything it can be your mobile no or it can look like your Gmail address. (like [email protected])
  • After that, your work has finished and you can easily send or receive money.

How UPI Works?

UPI is based on IMPS ( Immediate Payment Service System). Which we are using at the time of using other internet banking apps. You can use this service at any time or all the time.

But the one question may arise that if they all banking apps or The UPI are based on the same system, then what is the difference between them and how the UPI is different from that?

To understand this let’s take an example.

  • suppose you have to send some money to your friends or relative.
  • then what did you do on those apps? first of all, you open the app and log in to that app.
  • After then you have to add the details of the person to whom you want to send money.
  • At the time of adding you should put the many details.
  • For that, you must know the banking details of that person such as bank name, bank account number, IFSC code, branch name, etc.
  • To fill up all those details you have to spend lots of time into that.
  • But in UPI you don’t need to fill up all these things only you have to put the UPI Id of that person.
  • And select the amount that you want to send and you can easily transfer the money.
  • Because of that, you can save lots of time that is wasted by putting all those banking details.
  • There is a limit of transferring the money that is one lakh rupees per transaction.
  • And there is a fee also, that is 50 paise per transaction.
  • So that in this way you can do an instant money transfer.

Benefits of UPI Payment

  1. It is a very fast and secure way to do the cashless payment.
  2. In this technology, you don’t have to pay extra money whereas on other technology you have to give.
  3. In UPI money transfer will be successful instantly.
  4. This will work at 24×7.
  5. In UPI to transfer the money only, you have to know the UPI Id of the front ones.
  6. For this, you can use any of the UPI payment apps.
  7. You can open multiple accounts on one UPI apps.

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