India moved a step closer towards becoming a cashless economy with the launch of Unified Payment Interface (UPI). With this new payment method, your smart mobile phones will soon double up as virtual debit cards and you’ll be able to send or receive money instantly. For a number of years, we have been saying we need a revolution or we can say in short change in banking in India. I think we can confidently say the revolution is upon us. What we have in India is the most sophisticated public payments infrastructure in the world. BHIM (Bharat Interface Of Money) is the best example of Mobile Banking.
BHIM (Bharat Interface for Money) is the fast growing and simplest way to make payments and fund transfers/exchange. It has the following basic features of a UPI app and ha many specified features than any other app. BHIM is a Unified Payment Interface (UPI) can be thought of like an email ID for your money. It will be an unique identifier that your bank uses to transfer money and make payments using the IMPS (Immediate Payments Service). IMPS is faster than NEFT and lets you transfer money immediately and unlike NEFT, it works 24×7hours. This means that the online payments will become much easiest way without requiring a digital wallet or credit or debit card.
Currently, if you want to make a bank payment online, you have to enter their account number, account type, Bank name and IFSC code. Even if you have all these details, typing it all in, particularly on a phone, is a painful process. Most of the banks take upto 12 hours to add a new payee and only then you can make the transfer or exchange.
The thought behind the UPI is to do away with all of this. The interface will allow account holders across banks to send and receive money from their smart mobile phones using just their Aadhaar (UI) unique identity number, mobile number or virtual payments address without entering bank account details.
According to NPCI, so far only 29 banks have agreed to initiate this service. If your bank is UPI-enabled, you can ask it to connect you to the system. To start a transaction, you can use two types of address global or local. Global address includes your mobile, Aadhaar and bank account numbers. A local address can be a virtual address. Let’s say your bank gives you a virtual ID similar to your email ID (for example, name@companyname). This virtual address will allow you to send and receive money from multiple banks and prepaid payment issuers.
So, you will no longer need to use a particular app to send and receive money. For example, if you use a taxi service, at the end of the journey you just have to give your virtual address and the driver will request money from it. You will get a message on your mobile phone asking for authentication. Once you authenticate the transaction by entering your password, it will be complete. This process doesn’t require either the driver or you to share bank details. Since UPI runs on IMPS, the service will be available real time and 24X7.
Unified Payment Interface is an initiative by National Payments Corporation of India’s (NPCI), set up with the support of the Reserve Bank of India and Indian Banks Association (IBA). The NCPI operates the Rupay payments infrastructure that – like Visa and MasterCard – allows different banks to interconnect and transfer funds. IMPS (Immediate Payments Service) is also an initiative of NCPI. UPI is the advanced version of IMPS.
Register your bank account with BHIM, and set a UPI PIN for the bank account. Your mobile number is your payment address (PA), and you can simply start transacting. Yes! It is that simple.
Don't get confused, as this 4-digit PIN is not your UPI PIN, it's just a password to lock the BHIM app.
On the home screen, the app has three options. Send money, request money and scan and pay.
Click on the SEND icon.
Enter payee's mobile number or the Virtual Payment Address (VPA). (Click three dot menu in right top corner, if you want to send money directly to a bank account using IFSC code) Enter the amount and remarks to send money. Finally, enter the UPI-PIN and continue, That's It.
Click on the RECEIVE icon.
Enter payee's mobile number or the Virtual Payment Address of the person from whom you want the money. Enter the amount and remarks and submit. The payer would get a notification, and he/she can accept or reject the payment. For the security of its users, BHIM automatically logs out users if the app is closed or hasn't been used for a while.