Unified Payments Interface (UPI) is a system for instant payment launched by National Payments Corporation of India to facilitate instant fund transfer between two bank accounts with the help of a mobile application. This service is regulated by the Reserve Bank of India.
UPI has been created over the platform of Immediate Payment Service (IMPS) to facilitate fund transfer using VPA or virtual Payment Address. This address is a unique identity provided to the user by his or her bank upon creating an account in the UPI app. This identity could either be your email id, your mobile number with Mobile Money Identifier or your account number with the IFSC, or Aadhar number or a one-time use virtual ID. Each payment can only be confirmed by a Mobile Banking Personal Identification Number or MPIN.
UPI is a revolutionary method of money transfer introduced by the central bank to curb the lack of cash flow in the market due to demonetization. Almost all the major banks in the country are now UPI enabled. The banks can make use of this payment system by simply integrating it into the existing apps. Or banks also have an option of developing an altogether new UPI app. There is also an option for the bank to be UPI enabled without developing its own app.