Let's understand how United Payments Interface (UPI) works in simple terms.
| Setting up UPI | To get started with UPI, you need to download a UPI-enabled app like Google Pay, PhonePe, or Paytm from your phone's app store. Once installed, you'll need to create an account by providing your phone number and verifying it through an OTP (one-time password). |
| Linking Bank Account | This involves selecting your bank and providing the necessary details like your account number and IFSC code. Post verification, the account will be linked with the app. |
| Generating UPI ID | Once your bank account is linked, the UPI app will generate a unique UPI ID for you. Typically, a UPI ID looks like yourphonenumber@bankname. You can share this ID with others to receive payments directly into your bank account. |
| Sending Money | To send money using UPI, you simply need the UPI ID or mobile number of the recipient. Open your UPI app, select the "Send Money" or "Pay" option, and enter the recipient's UPI ID or mobile number. You can also choose the recipient from your contact list if they have a UPI ID linked with their phone number. |
| Transaction Details | After selecting the recipient, you'll be prompted to enter the payment amount. You can also add an optional note to specify the purpose of the payment, such as "Dinner expense" or "Shared rent." Review the payment details and proceed to the next step. |
| UPI PIN | To authorize the payment, you'll need to enter a UPI PIN. This PIN is a four or six-digit code that you set during the UPI app setup process. Enter the correct UPI PIN to validate and authorize the payment. |
| Transaction Completion | Once you enter the correct UPI PIN, the payment transaction is processed instantly. Both you and the recipient will receive a confirmation message on the app. |
That's it! The transaction is complete. UPI enables quick and secure money transfers between individuals and businesses, eliminating the need for cash or traditional bank transfers. It's a convenient way to manage your finances and make payments using just your smartphone.
Remember to keep your UPI PIN confidential and be cautious while sharing your UPI ID or conducting transactions.
