In India, the financial sector has experienced several reforms in the past 10-15 years which have all proven helpful for the population dealing in monetary transactions. In 2016, the Reserve Bank of India (RBI) offered a pilot launch for Unified Payments Interface (UPI), which has now transformed into a preferred fund transfer option in this modern day setup.
What is UPI?
- Unified Payments Interface (UPI) is an instant payment system that has been created by the National Payments Corporation of India (NPCI) and regulated by RBI. UPI has been developed over the IMPS infrastructure and permits the user to instantly transport money between any two parties (bank accounts).
- UPI-PIN (UPI Personal Identification Number), which is a 4-6 digit pass code, is necessary for making transactions. It is created during your first time registration with an UPI App. It is advisable on safety grounds to not share your UPI-PIN with any individual.
UPI Transaction Charges
The Unified Payments Interface in India has been on a steady track with expansion process active across all corners of the nation. Therefore, there are certain facts and details which aren’t actually known by the people who are using UPI payment mode for the first time.
Do we have to pay UPI charges on transactions? This question might have been the very first to strike your mind since other payment sources like IMPS, NEFT etc., do attract a particular charge on different transaction volumes.
However, shockingly till now there is no clear mention of UPI charges, but there are discussions which are pointing to a very meager amount being fixed for UPI transfers.
Expected Cost of UPI Transaction
Presently, the UPI is a free of cost fund transfer mode. The NPCI has, however, given indications that the charge for UPI transactions would fall in the range of Rs. 0.50. This is a negligible amount and won’t be a problem for any user who wishes to use this service. If this actually comes true, then the prime benefiter would indeed be the public.
Projected UPI Charges
As compared to other payment modes offered by the RBI, the charges for UPI are indeed very less and affordable to almost all of us. Let us check out the proposed UPI transfer charges for different fund values.
- Amounts up to Rs. 10,000: Rs. 0.50
- Amounts between Rs. 10,000 and Rs. 1 Lakh: Rs 0.50
The UPI charges for transactions over Rs 1 Lakh aren’t yet proposed and surely not decided until now.
How to Get UPI App
It is vital to remember that for using the power of the UPI payment system, you must have a UPI mobile application or a banking application that supports UPI. Currently, there are several UPI Apps available in India, with a few banks launching their own mobile applications for supporting this instant fund transfer setup.
Moreover, majority of the banks have simply incorporated UPI features into their presently active mobile application. For example, ICICI Bank has added UPI into the iMobile and Pockets.
Specifics of UPI Fund Transfer
Here are some really quick details that would guide you for making a successful UPI fund transaction without any hassle.
- Make use of the UPI app and provide the necessary details needed to transfer an amount to an account through Mobile Number/Aadhaar Number/VPA.
- NPCI identifies the correct account. There are no UPI charges as of now.
- Through UPI transfer, the money directly gets transferred to your bank account.
Advantage of UPI System
The UPI system is considered as a revolutionary launch for the Indian financial setup. Its primary aim is to make banking transaction smooth and relaxed. Let us analyze some of the prime benefits of UPI fund transfer which should be surely known by the public.
- The UPI transfers occur immediately and there is no restriction of working hours or holidays. Furthermore, bank strikes do not affect UPI payments.
- For making a UPI fund transfer you do not require any bank account number or IFSC code of the beneficiary.
- Interestingly, you can transact money from several bank accounts through a single UPI app.
- There is no need to wait for 24 hours to transfer funds to a new payee. Funds can be sent to anyone immediately without any additional processing time.
UPI FAQ
Here are some of the frequently asked questions regarding the UPI system and its usage.
- It is necessary for a customer to register before remitting funds via UPI?
Yes. A customer has to register in order to remit funds through his/her UPI mobile app after linking the accounts.
- Does the customer need to register a beneficiary so as to transfer funds through UPI?
The answer to this is NO. For transferring funds through UPI the primary requirements include a Virtual Payment Address/Account+IFSC/ Aadhaar Number or Mobile No+MMID of the beneficiary. Adding a beneficiary account is not required.
- Is it mandatory for the customer to hold a bank account or it can be connected to a card or wallet?
It is important to know that, even though a lot of flexible features are available under the UPI system, but a customer cannot connect a wallet to UPI. Only bank accounts can be linked for successful fund transfers.
- Can I access more than one UPI application on my smart phone if they are connected to different bank accounts?
Yes, it is quite convenient for using more than one UPI application on a single smart phone. It also offers you the ease to link different bank accounts without any difficulty.