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Paytm se UPI — a nod to cashless economy

Jul 14, 2022, 15:57 IST
Business Insider India
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Traditional methods of fund transfer, such as Immediate Payment Service (IMPS), Real Time Gross Settlement (RTGS), and National Electronics Funds Transfer (NEFT) have been popular amongst the Indian masses for a long time. However, a newer method of fund transfer has overtaken them in the recent past.
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Unified Payments Interface or UPI is a digital payment system enabling money transfers and the handling of a person’s multiple bank accounts via a single mobile app. And this digital payment system has been creating records – surpassing the five billion transactions in a month in March this year.

While the older methods require the provision of the receiver’s name, contact number, bank account number, IFSC, etc., UPI payments require only a UPI ID/mobile number/QR. These identifications are unique to every user, and hence, are less likely to be misused.

Another benefit of this is that in an online transaction, one can easily link multiple accounts to their UPI ID. The person can also choose which bank account they want to use to make the payment or receive money through UPI.

According to a research report, UPI continues to dominate daily debit transactions. Infact, UPI transactions in India have doubled in volume and value on a YoY basis, crossing the Rs 10 trillion mark in May 2022.

What is a UPI?


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A UPI ID is a virtual payment address (VPA) for every UPI user. To access the UPI services, a user has to first generate a UPI ID. This UPI ID acts as a unique identifier for the user’s identity.

A UPI ID is written in the format “abcd@bank” where:

  1. ‘abcd’ can either be a user’s first name, a part of their email address, or their mobile phone number, and
  2. ‘bank’ is the name/initials/shortened name of the bank providing services to the UPI app
Per the servicing bank, there might be a prefix or suffix added to the UPI ID as well.

How to create a UPI ID?




Creating a UPI ID is quick and easy:
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  • Download a UPI payment application, like Paytm
  • Enter your mobile number. If you have a dual SIM phone, you may be prompted to select the SIM slot in which your mobile number is present
  • An SMS will be sent to you to verify your mobile number
  • Once this is done, you are required to select your bank name from the list presented to you. Please make sure that the mobile number registered with your bank is the same as the one you entered earlier. Your bank account details will now be fetched from the bank using your mobile number
  • If you are linking your bank for the first time, you will be asked to set up a UPI PIN. You will need your debit card details for setting this up
  • Your bank account is now linked via UPI
You are now ready to make your first payment!

How to send money using UPI ID?


To conveniently transfer funds through UPI, follow these steps:

  • Log in to your UPI payment application, such as Paytm, and click on the ‘UPI/Send Money To Anyone' option
  • Select the receiver from your phone contact list or enter the mobile number of the receiver
  • If the receiver does not use the app you use, you could ask them for their UPI ID on another app and enter that ID
  • You could also click on the ‘Scan QR’ option and scan the recipient’s QR code
  • Next, select the bank account from which you want to make the transfer and click on ‘Proceed’
  • Finally, enter UPI PIN associated with the selected bank account
  • The amount will be immediately transferred from your bank account to the receiver’s bank account

Regulated by the Reserve Bank of India and National Payments Corporation of India, a UPI ID is completely independent of the bank account number or any other personal detail, which makes it absolutely safe. UPI also aids the participating banks by helping them track the user’s account, thereby, ensuring safety. The security of Paytm UPI, especially, is fool-proof since all the transactions take place in a safe, highly encrypted ecosystem.

UPI has truly eliminated the complex process of transferring money, and facilitated inter-bank peer-to-peer and peer-to-merchant monetary transactions!
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Disclaimer: This article is generated and published by the Insider Studios team. You can get in touch with them on insiderstudios@businessinsider.in
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