Unified Payment Interface
UPI stands for Unified Payment Interface. It is an effective way to move towards a ‘less’ cash society. One may even add that it is the most effective way to reduce dependence on Visa/Mastercard/American Express and the closed/semi-closed wallet systems. So let’s explore more about UPI.
What are the pre-requisites?
1) Android smartphone with internet connection (UPI is currently unavailable on iOS, Windows platform)
2) UPI app of any bank/mobile banking app
3) Virtual Payment Address (VPA). This is a unique address which is to be created while using the UPI application. This is just like an email address (e.g. prasad@icici) but an email address for your money.
Steps for Registration:
1) User downloads the UPI application from the App Store / Banks website.
2) User creates his/ her profile by entering details like name, virtual id (payment address), password etc.
3) User goes to “Add/Link/Manage Bank Account” option and links the bank and account number with the virtual ID.
What are the benefits of UPI?
UPI can be used to transfer money to peers, make merchant payments, COD payments (currently available for Flipkart). This is very similar to IMPS but with lesser charges and without the need of account numbers & IFSC codes. You just need the VPA of the receiver or the QR code generated by the merchant. Also the VPA can be linked to any bank account. The money is debited from giver's account and credited to the receiver's account.
The biggest benefit is that the money does not get locked into closed/semi-closed wallet systems like Ola money, PayTM, FreeCharge etc. Since no PoS (swipe) machine is required it can be easily used by small vendors helping them go 'digital'. UPI can easily replace petty cash transactions. The money saved by avoiding PoS machines and consequent charges paid to Visa/Mastercard/American Express can be passed on to the customers.
Add on benefit:
Since you are less dependent on credit cards you are less prone to mental accounting.
Please share ideas, experiences and alternate views.
Prasad Patwardhan
UPI stands for Unified Payment Interface. It is an effective way to move towards a ‘less’ cash society. One may even add that it is the most effective way to reduce dependence on Visa/Mastercard/American Express and the closed/semi-closed wallet systems. So let’s explore more about UPI.
What are the pre-requisites?
1) Android smartphone with internet connection (UPI is currently unavailable on iOS, Windows platform)
2) UPI app of any bank/mobile banking app
3) Virtual Payment Address (VPA). This is a unique address which is to be created while using the UPI application. This is just like an email address (e.g. prasad@icici) but an email address for your money.
Steps for Registration:
1) User downloads the UPI application from the App Store / Banks website.
2) User creates his/ her profile by entering details like name, virtual id (payment address), password etc.
3) User goes to “Add/Link/Manage Bank Account” option and links the bank and account number with the virtual ID.
What are the benefits of UPI?
UPI can be used to transfer money to peers, make merchant payments, COD payments (currently available for Flipkart). This is very similar to IMPS but with lesser charges and without the need of account numbers & IFSC codes. You just need the VPA of the receiver or the QR code generated by the merchant. Also the VPA can be linked to any bank account. The money is debited from giver's account and credited to the receiver's account.
The biggest benefit is that the money does not get locked into closed/semi-closed wallet systems like Ola money, PayTM, FreeCharge etc. Since no PoS (swipe) machine is required it can be easily used by small vendors helping them go 'digital'. UPI can easily replace petty cash transactions. The money saved by avoiding PoS machines and consequent charges paid to Visa/Mastercard/American Express can be passed on to the customers.
Add on benefit:
Since you are less dependent on credit cards you are less prone to mental accounting.
Please share ideas, experiences and alternate views.
Prasad Patwardhan
No comments:
Post a Comment