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What is UPI and How is it Used? Advantages and Disadvantages of UPI.

Let's get information about UPI. First of all, what is the full form of UPI? UPI stands for Unified Payments Interface.

Let's get information about UPI. First of all, what is the full form of UPI? UPI stands for Unified Payments Interface, the latest means of making internet-based payment payments.

To use UPI, you need a bank account, its associated mobile number and a mobile app. If your smartphone has an UPI app then you can easily transfer money.

What is UPI and How is it Used? Advantages and Disadvantages of UPI.
What is UPI and How is it Used? Advantages and Disadvantages of UPI.

VARIOUS MODES OF PAYMENT PREVALENT BEFORE UPI

Since ancient times, currency has been transacted for trade exchange. over time, there has been a change in the form of currency. precious metal coins like cowries, leather coins, gold and silver, paper notes, etc., have been used at different times.

As the technology evolved, so did the methods of payment. The time of cheques, demand drafts, pay orders, money orders, etc., also came and went. In today's time, the emergence of internet has provided new dimensions like ATM, NEFT, RTGS, SWIFT, IMPS, BHIM and UPI for payment.

All these mediums have reduced cashless transactions significantly, and by tapping a few clicks and mobile screens, we can transfer or receive money in a pinch.

Ever since the use of UPI has increased, some new types of frauds have also started happening, we will also read how can you keep yourself safe from online frauds?

What is UPI? UPI Information

In 2008, the Reserve Bank of India and other large banks formed an institution called the National Payments Corporation of India (NPCI). The main objective of this non-profit organization is to facilitate the transaction of money in the economy of the country. In this episode, NPCI launched UPI in 2016.

Your bank's UPI app allows you to register a Virtual Payment Address (VPA). Using which you can provide an ad-hoc payment.

The format of the VPA is similar to that of an email address, for example, something like this:

VPA Example: username@bankid 

You can make the payment immediately by entering the VAPA ID of any beneficiary on your UPI app. The facility works 24 hours a day and seven days. Even on Sundays and other holidays, you can make money transactions with it.

Advantages And Limits Of UPI

  • This facility works on real time basis which means money is hand-in-hand transfer
  • UPI works 24 hours a day and also on holidays
  • You only need to know the VPA address to transfer money. You don't have to remember IFSC code, bank account number or MICR etc.
  • Every day you can transfer up to Rs. 1 lakh through UPI, but all the banks have set different limits per transaction.
  • Payment can be made immediately by UPI in an emergency. Apart from this, bill payment from UPI, online shopping and QR code scan can also be made to the shopkeeper.
  • UPI facility is available in almost all banks. By the time of writing this article, about 150 small and big banks are providing UPI facility.

Disadvantages of UPI

1. Security Concerns: 
There are various security concerns with the UPI app as it has been developed in a hurry. It is not secure to use the UPI app as it makes use of OTP and PIN without any encryption or security mechanism. In addition, it seems that there are no restrictions on how many times you can enter the wrong PIN code before your account gets blocked. This makes the system less secure for banking transactions.

2. Politicization: 
Digital payments are not new in India; we have had them for years now in the form of mobile wallet apps like Paytm, Mobikwik, and Freecharge among others.

How To Use UPI Safely?

With the advent of digital payments, thugs also keep on finding new ways to cheat. Let us tell you how to make safe payments from your UPI app?

These rules will help you to secure not only UPI but also other types of online payments.
  • Always keep your mobile and UPI apps updated
  • Don't give your mobile to any strangers.
  • Don't make spelling mistakes when typing VPA address
  • When you enter someone's VPA address to transfer money, their full name appears in the app. Verify that name before making the payment.
  • Do not tell any unknown person any type of OTP, card number, account number, CVV number, etc.
  • Some thugs transfer a small amount of money like 10 or 100 rupees to lure you. After that, they try to transfer the money by trapping you in the trap. Please don't get lured or else you may be cheated.

Wrapping Up

Let's hope that you have got information on the topic related to UPI, if you still have any questions, you can ask by writing in the comments. This article can also be shared with your friends and relatives through the share buttons below.

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