Launched in 2016, the United Payments Interface (UPI) is a great way for average consumers to facilitate daily payments. While banks offer their own UPI apps for download, most customers tend to use payment gateway apps that function on UPI instead. This is because many of these apps come with built-in features that aim to cover various aspects of the payments universe. For instance, payment apps allow vendors to generate their own QR codes and study consumer metrics in order to add value to the way they run their businesses.

While such features can be immensely beneficial for small businesses and merchants, the average consumers also stand to gain from using UPI payment apps. This is mainly because of the vast range of features and use-cases they have.

Features of UPI payments

UPI payment apps offer a simple solution to a very basic problem – how to pay someone for their services or products quickly.

Some of the features of this mode of payment include:

  • Reliability: First and foremost, as UPI is launched by the National Payments Corporation of India (NPCI), one of the biggest features associated with it is its reliability. The problem with using third-party gateway apps to facilitate payments online is often the fact that even the slightest fluctuation in internet can lead to the loss of money. Though these gateway apps offer excellent customer service and help customers get their money back, often the issues lie with the website or portal they are used on, and the same is not always possible. With UPI, customers have far greater control over transferring their funds and do not have to worry about them getting lost along the way
  • Real-time transfers: Another vital feature associated with UPI is the fact that all transfers occur in real time. Customers press the send button and their beneficiaries receive the payments in a matter of seconds. As a result, basic daily-life activities such as buying groceries, taking an auto or cab home from work, or paying a friend back after borrowing money are simple and convenient. The 2-step process used in these payments makes it easy for customers to enter the digital economy without having to think twice
  • Inclusivity: UPI does not always rely on the internet. While this functionality depends on the payment app used, UPI offers the option to conduct transactions without a smartphone or working internet. In order to do so, consumers must simply send specific text messages to initiate the transactions. As a result, individuals belonging to all sections of society can enter the digital world. As many payment apps also offer instructions in regional languages, they make it even simpler for many people to be a part of this revolution
  • No minimum transaction limit: UPI does not have a minimum transaction limit. Payments as low as Re 1 can be made while using this payment mode. As a result, this makes the idea of using digital transactions far more palatable to people who must conduct daily transactions with vendors or merchants. Unlike NEFT and RTGS payments, UPI does not have a transaction charge, as of now. This adds to the overall convenience of using these forms of payments.

What is the UPI ID and How to Use It?

Your UPI ID functions almost in the same way your name does. It offers a Virtual Payments Address for senders to enter when transferring money to your account. In order to create your own VPA or UPI ID, you must begin by downloading any app of your choice and registering yourself on it.

The registration page will have a section that asks you to enter your UPI ID. The ID can be anything you want it to be and once you enter a password and confirm the same, it will be yours to use.

How to use it?

The UPI ID or VPA is what you share with your customers or family when they need to make payments to you. It is the detail that you can use instead of sharing your bank account number. Picture this – when you wish to send a text message, you must first enter a name or number in the recipient’s section. The UPI ID functions the same way. In fact, one cannot send money to someone or receive money from someone if one does not know the UPI ID. As this is the detail that you can use instead of sharing your bank account number, UPI is a very secure way to conduct transactions, without worrying about someone misusing your banking details.

Do keep in mind that there are daily limits to the transactions you can make. The same is shown in the table below:

Per transaction limit Per day total limit
Rs 1 lakh Rs 1 lakh

Saurin Parikh

Saurin heads Content at Razorpay. He's a fintech enthusiast who enjoys long walks in the Bangalore weather. He says he's a "cool dad" (those are his words, his son has refused to comment). He writes primarily on personal and business finance, and a little bit on marketing.