Unified Payments Interface (UPI) is a mobile based, 365x24x7 ‘fast payment’ system. Through UPI, users can send and receive money instantly by means of a Virtual Payment Address (VPA) set by the users themselves. The unique feature of VPA based transaction is the secure aspect of UPI architecture as it removes the need for sharing account or bank details to the remitter. UPI fast payment system can be used over app based smart phone, feature phone (USSD based) and at app based merchant location. It supports person to person (P2P) and person to merchant (P2M) payments and facilitates immediate money transfer through pull and push payments, merchant payments, utility bill payments, QR code (scan and pay) based payments, etc. Non-financial transactions such as mobile banking registration, balance enquiry, etc., can also be carried out using UPI. Funds can be transferred using VPA or account number with bank code (IFSC). The system enables multiple bank accounts into a single mobile application of any participating bank / non-bank Third Party Application Provider (TPAP). Currently, UPI Transactions up to a limit of Rs.2 lakh per transaction are carried out through mobile devices with two factor authentication using device binding and a UPI PIN as security. The UPI PIN is encrypted using Public Key Infrastructure (PKI) technology while the transaction data is stored in encrypted format in app provider’s system.
UPI structure includes NPCI as network and settlement service provider, Banks as Payment System Providers (PSPs), and as issuer banks and beneficiary banks. Besides, Third Party Application Provider (TPAPs) such as Google Pay, Truecaller, WhatsApp, etc., Non-bank PPI issuers has also been allowed to provide this facility in an interoperable manner to their PPI wallet holders.
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