upi money transfer

Beginner’s Ultimate Guide to UPI Money Transfer

What is UPI?

The full form of UPI is the Unified Payments Interface. It is a payment system where you can make real-time and instant interbank payments and money transfers on your mobile. UPI is owned by NPCI (National Payments Corporation of India) and is regulated by RBI (Reserve Bank of India). It is like the RuPay platform launched for debit and credit cards.

upi money transfer

In the present scenario of digital transformation and cashless economy, UPI money transfer is one of the notable advancements. It has eased the life of people and especially small businesses are greatly benefited from it.

what is upi

However it was launched by NPCI in 2016 as an app but its potential was not realised at that time. Now every bank and businesses involving money transfers have launched their own UPI app. It is very popular and adopted now.

What is VPA in UPI?

VPA is your Virtual Payment Address or you can also say that it is your unique UPI ID through which you can send or recieve money from and to your bank account.

What is UPI Payment?

what is upi payment

When you transfer money from your bank account to another bank account through a UPI app in which your bank account is linked, the payment process is called UPI payment or UPI money transfer.

How UPI works?

For using UPI, you need to register for it for e.g. if you wish to use Paytm UPI you need to register for UPI on Paytm App, and if you wish to use Google Pay or PhonePe you will have to regsiter on their specific apps.

how upi works

Following are the pre requirements for using UPI:

  • A Smartphone
  • An Internet connection
  • A Bank Account
  • An active mobile number linked with the bank account

How to create UPI ID?

You need to follow the below steps to register for UPI and create your UPI ID:

how to create upi id

STEP 1. Download the UPI app you want to use (GPay, PhonePe, BHIM, Paytm etc.)

STEP 2. Choose your language, verify your mobile number and select your bank account linked to it.

STEP 3. Create your profile by giving your details and a unique ID. This will be your VPA (Virtual Payment Address). 

STEP 4. Go to Add/Link ban accounts and link your bank account with the created VPA.

STEP 5. Set your mPIN to validate and authorise the money transfers.

STEP 6. Congratulations! Your registration is complete.

After registration is complete you have your UPI ID which is your unique financial address (just like your any ID proof number is unique) that you can use for instant payments through UPI transfer. You need not to visit your bank and ask them to transfer money using NEFT, RTGS, Cheque, etc.

Banks take service charges for a money transfer but UPI is almost free of cost. You can transfer funds through UPI 24*7 even on bank holidays.

What is UPI Pin and How to Create it?

UPI Pin is a unique 4 digit or 6 digits numerical code st by you to authorize or validate the money transfer through a UPI app. It is also called mPIN. There are two ways to create mPIN for UPI transfer:

what is upi pin
  1. Offline – By dialling *99# from your phone dial-pad and following the next steps.
  1. Online – You will receive and OTP and will require last 6 digits of your debit card and your debit card expiry date.

How to change UPI Pin?

Follow these steps in case you wish to change your UPI Pin:

how to change upi pin

STEP 1. Open the UPI app (GPay, PhonePe, BHIM, Paytm etc.)

STEP 2. Go to Menu or Setings option inside the App and click on Bank Accounts section

STEP 3. You will find all your linked bank accounts here.

STEP 4. Click on the account for which you want to change the PIN.

STEP 5. Click on the Forgot PIN/Reset PIN option.

STEP 6. Enter last 6 digits of your ATM card and the expiry date.

STEP 7. Enter the new PIN and you are done.

UPI Money Transfer Process

Now you will learn how to transfer money using UPI. UPI money transfer includes two aspects – sending money and receiving money. We will discuss both of them one by one.

You may be interested in reading our post on Paytm Money Transfer

How to Send Money through UPI?

Follow these steps to send money through UPI:

upi transfer

STEP 1. Ope the UPI enabled application on your phone.

STEP 2. Go to Payment/UPI/Send Money/Recieve Money section.

STEP 3. Select Pay/Send/Transfer Money.

STEP 4. Enter the payee’s UPI ID or Scan a QR code.

STEP 5. Enter the amount in rupees you want to send.

STEP 6. Enter your mPIN to validate the transaction.

STEP 7. Your Payment is complete.

How to Receive Money through UPI?

Follow these steps to receive money through UPI:

what is vpa in upi

STEP 1. Ope the UPI enabled application on your phone.

STEP 2. Go to Payment/UPI/Send Money/Recieve Money section.

STEP 3. Select Recieve/Collect/Recieve/Request Money.

STEP 4. Enter the payee’s UPI ID and the amount you want to recieve.

STEP 5. After submitting your request, the payer will receive a request to pay money on his UPI app.

STEP 6. If he enters his mPIN to validate the transaction, money gets credited from his bank account to your bank account.

STEP 7. Your Request is complete.

UPI transfer Limit

upi transfer limit

There is a limit of Rs 1 Lac per day for all the transactions done through all the UPI apps you have. The updated UPI 2.0 App rolled out by NPCI in August 2018 allows transactions up to Rs 2 Lac per day through all the UPI apps you use however it is adapted by few banks only till now.

UPI Transaction Charges

upi transaction charges

As of now, there are presently no charges however NPCI has indicated that they will charge Rs 0.5 per transaction as IMPS charges for UPI transactions. Some big private banks like HDFC, ICICI, Axis, and Kotak Bank have already levied charges ranging from Rs 2.5 to Rs 5 (excluding GST) per transaction after 20 transactions in a day to avoid misuse of the UPI interface.

What is UPI 2.0?

In order to provide better services and add more functionalities, NPCI launched UPI 2.0 in August 2018 which has some additional features like:

  1. Mandates to block a sum in the account and pay at a later date.
  1. Invoice details reach the payer in advance and the payer can pay the amount after proper verification of the invoice details. 
  1. An overdraft account can now also be linked to UPI. Previously only saving accounts were allowed.
  1. Authenticity of merchants can be checked (whether the merchant is a verified UPI merchant or not) while making payments using QR codes.

Currently some banks are using UPI 2.0 and others are in a plan to launch it soon through their UPI apps.

FAQs Related to UPI Money Transfer

upi faqs

Here are some frequently asked questions related to UPI money transfer:

Q1. What are the things I can do with UPI?

Ans. You can send or receive money, pay bills, do recharges, book tickets, and any transaction that requires money to be debited or credited from or to your account.

Q2. Is UPI secure?

Ans. UPI uses highly secure encryption and two-factor authentication in which the chances of tampering are very low. UPI is managed by NPCI which handles around 8 Crore worth transactions per day.

Q3. Which Apps allow UPI money transfer?

Ans. There are many. Some popular apps are Google Pay, PhonePe, BHIM, Paytm, Amazon, etc.

Q4. Why even after selecting my bank name, the bank account can not be found?

Ans. Make sure you have the same mobile number linked to your bank account which you are using in your phone. If problem persists contact your bank.

Q5. What is the difference between UPI and IMPS?

Ans. UPI adds and additonal layer over IMPS and simplifies the process providing better encryption and two factor authentication.

Q6. Is bank account mandatory for UPI or I can add my wallet or card to it?

Ans. You can not add your online wallets and cards to UPI. Only ban account can be linked to it.

Q7. Can I link more than one bank account to a single UPI ID?

Ans. Yes you can use more than one bank accounts to a single UPI ID or VPA.

Q8. What if I changed my mobile number?

Ans. There is no issue. You can continue using your UPI apps.

For further FAQs regarding UPI, you can visit the official NPCI website.

Final Thoughts

According to a recent KPMG report the global digital payments market is expected to touch $10.07 trillion by 2026. Digital payments were accepted by around 1.5 million locations which has rose to over 10 million today.

future of upi

UPI has really revolutionised the digital banking and cashless transactions and almost eveyone is using it presently. It is the fastest, cheapest and the most convenient way to send or recieve money nowadays. You just need a smartphone, an internet connection and a bank account to proceed with UPI money transfer. It has helped the small merchants and businessmen to avoid costs and save time in transactions.

The relationship between the customer, the merchant, and the intermediary has improved due to the rise of digital means. The future holds great opportunities for UPI and it is expected to advance more in the coming time. 

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