Unified payment interface (UPI), is a payment system developed and launched by the National Payments Corporation of India (NPCI). UPI is just like other kinds of payments such as cheque or a mobile wallet. Under UPI, you can transfer money instantly between two bank accounts. Like NEFT, there is no time limit to transfer money using UPI, you can transfer money whenever you want, that means it is open 24/7.
Anyone who has registered their mobile number with their bank account, can use UPI to send and receive money.
UPI is a very convenient method of payment, as it doesn't require bank details such as CVV, IFSC code and card details to send money from one bank account to another bank account. It allows you to send and receive money on your smart phone using the mobile number, Aadhaar number and virtual payments address.
To transfer money using UPI, you have a global address and a local address. Your Aadhaar number and mobile number is your global address and the virtual address is your local address. Your Virtual address looks like an email address. For instance in abc@icici, abc is your username and icici is your bank for the UPI.
Under NEFT and IMPS, to make any transactions, you need to give a bank account number and the IFSC. Under UPI there is no need to enter all your bank details. You just need the recipient's mobile number, which they have registered with their bank account.
Many people do not use online transactions because of safety issues. UPI helps to minimize this problem. UPI has a single click-two factor authentication system as mandated by the RBI. Under the 2-factor authentication system, with a single click, the transaction is authenticated at two levels.
UPI enabled apps allow you to transfer up to Rs 1 lakh.
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