What is UPI Payment and How does it Work

05 January, 2024

Unified Payment Interface (UPI) can be defined as a payment system where multiple bank accounts (of any participating bank) can be brought together in a single mobile application to perform several banking transactions, including merchant payments and fund allocation. UPI also enables you to collect ‘Peer to Peer’ payment requests and schedule them in a convenient manner depending upon the requirement. Continue reading on to know more about what UPI is and how it works.

Features of UPI

Some of the prominent features of UPI are listed below:

• Instant transfer of money through mobile devices 24 hours a day and all year long
  
  

• Accessibility to different bank accounts through a single mobile application
  
  

• Seamless single click payments with 2-factor authentication aligned with regulatory guidelines
  
  

• Virtual payment address (VPA) of the customer that is unique to them and used for different banking services provides security
  
  

• Quick Response (QR) codes facilitate swift, secure transactions between peers and customers and merchants
  
  

• Payment for utility bills, over-the counter purchases, and others can be done easily
  
  

What Are the Benefits of UPI Payments?

Here are some of the benefits for customers:

• Authentication with a single click
  
  

• The ability to raise complaints from the mobile app
  
  

• Round the clock availability with a working internet connection
  
  

• One application can be used to access different bank accounts
  
  

• No need for sharing sensitive information, instead you can share a virtual ID

Virtual Payment Address (VPA) in UPI

VPA is a unique identifier that allows you to transact via UPI. It frees you from the hassle of entering the beneficiary’s account number, IFSC, name, bank details, etc. The VPA, which resembles an email address, is linked to your bank account. Also, several bank accounts can be linked to the same virtual address.

How to Register for UPI?

Given below are the steps to register on PayZapp:

1. Download the PayZapp app.
   
   

2. Register using your mobile number.
   
   

3. Add bank accounts.
   
   

4. Set UPI pin for the account.
   
   

*You can easily change the UPI pin later if required.

How Does UPI Work?

The most basic functions of any UPI are push (sending money) or pull (receiving money).

Here’s how you can ‘push’ or send money using PayZapp:

1. Launch the app and choose ‘Send Money’ from the Home Screen
   
   

2. Select any of the three tabs:
   
   

• ‘To Any App’ for sending money to the beneficiary using their phone number, UPI ID, name, etc.
  
  
• ‘To Account’ for sending money to the beneficiary using their bank account details (account number, IFSC code, and name)
  
  
• ‘Self Transfer’ for transferring money to one your accounts
  
  

1. Enter the relevant details and identify the individual to whom you wish to send money.
   
   

2. Enter the amount you wish to send.
   
   

3. In case of multiple linked bank accounts, select the one which you want to use to pay the beneficiary.
   
   

4. Select ‘Pay’ and enter the 4- or 6-digit UPI pin.
   
   

If you choose ‘Scan QR code to pay’ option in PayZapp, you will be able to scan the QR code displayed on the beneficiary’s UPI app.

As soon as the money is debited from your account, you will get a notification. In some cases, the money may get deducted from your account, but the receiver may not have received it instantly and the transaction is cancelled. Here, the money is refunded to your account immediately or in a few days.

Given below are the steps to ‘pull’ or receive money using PayZapp:

1. Launch PayZapp and go to ‘Accounts & Cards’ option on the home screen.
   
   

2. Select the ‘Requests’ option where you can view and manage requests.
   
   

3. Select ‘Payment Requests’ from the pop-up.
   
   

4. Click on ‘Request money’ button at the bottom of the screen.
   
   

5. Enter the name, number, or UPI ID in the search box or browse your contacts to identify the payer from whom you wish to request money.
   
   

6. Enter the amount you wish to request (adding a message here is optional as well).
   
   

7. Click on the ‘Request ₹ amount’.
   
   

8. You will get a notification informing you that the request has been sent to the other party.
   
   

You will be notified once the payer accepts the payment request and successfully completes the payment.

The Bottom Line

UPI has helped India get one step closer to becoming a completely digital economy. From small vendors at the nearby market to big tech giants, almost everyone is accepting UPI payments. Now that you understand how UPI works and what is it you can utilise the benefits of cashless transactions with the help of secure, swift, and convenient UPI-enabled apps like PayZapp. Whether it is paying bills, recharging service plans, paying insurance premiums, making donations, or sending money, you can do it all and more with PayZapp.

*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.