UPI : Cash Transfer like Email.. Literally!

Who knew money could be sent with just an ID?

I don’t like to put money into my e-wallet and later “hope” to spend it. Nor do I want to hold up the que trying to explain at the counter how I want them to deduct the two rupees in my wallet and take the remaining amount in the form of hard cash. I also hate it when I send money to my friend over net-banking and it takes upto 24 hours and the transactions has to happen during certain hours in a day.

Solution : UPI — Unified Payments Interface. [Indian Bank A/C holders only]

UPI enables me to pay the proper amount without having to add any money into a wallet before hand, nor having to select pointless coupons which are only applicable if I pay using that same wallet.

What is UPI?

There are many pages out there like Wikipedia and many other descriptive articles [See Below] that describe UPI in detail and with technical information. So I’ll avoid that.

I will just explain the concept in simple terms, the awesomeness of it and the application.

TL;DR : Short Version

A UPI is a money transfer and usage system with:

No Cash or Card Required : You don’t need hard cash, debit or credit card to receive or make payment. 
 No waiting : Money is transferred instantly 24/7/365. 
 No e-wallets : Money is transferred bank to bank directly. 
 No IFSC Code : You don’t need to send IFSC code. 
 No Commission : Since payment is bank to bank there is no middle man commission. 
 No Trouble : Built for mobile. Accessible from anywhere with Internet. 
 Secure : 2-factor authentication, encrypted connection and using only VPA prevents people from intercepting bank details.

Longer Version

So to put it in simple terms, UPI is system which banks have implemented to transfer money like it should on the internet. Not like it does with conventional net-banking.

I hate the 24 hours transaction time in net-banking systems. UPI does it in seconds, 24 hours a day, 365 days a year (provided you have a working internet connection, and even on the leap day).

What’s more, No more hassles with Bank Name, A/C, IFSC, ISBN, BCCIs and ROFLs. All you need is something called a VPA[Virtual Payment Address]. Which looks like and works like an email. Literally!

It looks like username@bank.

For those of you that find this weird, this is just like your bank being google and you signing up with yourname@gmail.com to get money instead of text based emails. So If I sign up with SBI’s UPI app and link my account, I can receive and send money using just atulbhats@sbi which would be my VPA .

What’s better, you can have the relation between VPAs and Bank A/Cs in one-to-one and many-to-one fashion. Which in non-tech terms means, you can have many VPAs connected to one account as well. Which also means join account holders can have a VPA each for the same account.

Most banks have their own UPI app for smartphones that allow you to create an id (VPA) and link your bank account to your id. If you do not find the app for your bank, then just install any other bank’s app. It does not matter which bank you have an account with. Just select the UPI app based on your needs (check for screenshots/previews on the appstore/playstore before installing) and install it. I did it the same way. I installed SBI’s app to create an account. But that would only allow me to transfer money to another account, whereas the app for Yes Bank would allow me to transfer money, pay by scanning a QR code, pay utilities, recharge etc. So I got the Yes Bank app and got a username@ypl id for the same SBI account. I now have two VPAs for the same SBI account.

The system also fetches the user’s Full Name when you enter the VPA so that you can verify that you are sending your money to the right person.

The only drawback is I can not give someone by @sbi VPA and check the money transactions through the Yes Bank UPI app. However, I can still check my balance and know if the money was transferred. So it is always better to provide the VPA created with the app that you use, for transactions.

Also, the cash transfer limit per transaction is another drawback if you plan to transfer more than 1 Lakh in a single transaction.

So now there is need for an e-wallet app where I had to enter my card, account or other info (which most of them save even if I deny), put money before hand or any benefit any other middle-men for a purchase. It is instant and OTPs are also eliminated thanks to MPIN.

Many of these apps also allow users to create a QR code which can be put up by vendors and shop owners which will enable the customer to pay cashlessly as well. Or they can simply put up their VPAs in display at the cash counter. People should be informed about this amazing feature and implement it.

Do not consider the recent twitter hack of some of the political handles as something that would affect this system. They were just irresponsible in not having utilized twitter’s security mechanisms. So do not forget your passwords and do not share your password with anyone other than you. And please avoid Birthdays as your MPINs.

Why Should you use it?

This is the best cure from the hangover of demonetisation and the best way to clean up the country. E-wallet apps have sent us all an SMS describing to go cashless and use their apps. But why include them? Directly manage it with your bank. Safer and easier… No prepaid transaction before purchase and other baggage. Just use what the government offers and be happy. Remove all the unwanted variables from the equation make the country go cashless, digital and advanced.

I couldn’t help but notice the pointless forward messages and changing of display pictures which make no social influence. Instead, spreading news about this wonderful reform in the banking sector and the ease of use will do what we actually intend to do with those messages and display pictures. Banking is at your doorstep. Open the door and welcome the move.

So stop giving reasons like “this does not apply to me”, “I can go to the bank instead” and the like. Download your Bank’s UPI app or any other UPI app that suits your needs and get your VPA today!. Support the government in achieving the “Swacch Bharat” and “Digital India” mission.

For further reading and more information:

  1. UPI FAQ
  2. What Is UPI And How It Will Benefit Your Business
  3. Unified Payments Interface / UPI, India. An introduction. Plain and simple
  4. UPI: India’s biggest and boldest payments interface bet yet
  5. #CashlessConsumer — eWallets, UPI, UPI-Wallets
  6. Review / Comparison matrix of all UPI Apps

PS: Always carry some cash with you and a card. Unless we have an uninterrupted telecom and broadband network in every corner of this country, there are chances that your network or WiFi fails just before payment. So always have a Plan B.

The complete story was originally posted on my blog