Full Form of UPI

The full form of UPI stands for Unified Payments Interface. It is a real-time payment interface developed by the NPCI that facilitates instant transfer between two bank accounts. In addition, it incorporates multiple bank accounts in one interface.

UPI is a revolutionary invention that has led to a significant change in the country's payment ecosystem. Implemented in India, it has garnered global accolades for the ease of its operations and zero or low transaction costs. it eliminates the need to manage multiple accounts separately while seamlessly making payments for purchases or to peers.

UPI is a real time payment system. The National Payments Corporation of India (NPCI) developed it and the process allows the user to transfer money instantly between banks using a mobile. It helps in easy and faster transactions and has easily gained a lot of significance and popularity in India.

The full form of UPI in bank is Unified Payments Interface, which connects multiple bank accounts using the user's mobile number with one app. Once the user's bank account connects with the app, the user can instantly make payments to other bank accounts from his bank account. In addition, the user gets to select the bank account he needs to use every time he makes a transfer or payment.

To facilitate UPI (Unified Payments Interface) for their customers, the banks must come on board with UPI. Therefore, customers can not use UPI if their banks have not opted to participate in the UPI ecosystem.

The full form of UPI in bank, which is as given above, is an interface that has picked up pace after the demonetization of the Central Government and has helped solve the payment woes of people across the country. As of March 2019, 144 banks have been on UPI, facilitating transactions of a whopping ₹1.334 trillion (USD 19 billion). While the payments may look small concerning the global standard of digital payments, they are still significant for the country where mobile data adoption has started picking up as recently as 2016.

UPI has the following useful features. Let us go through them in details of full form of UPI code.

#1 - Money Transfer Around the Clock Every Day

UPI (Unified Payments Interface) works round the clock and on all days, even bank holidays. This payment system works much better than NEFT, which has timing limitations to conduct the transactions, and IMPS, which requires you to handle your different accounts differently.

#2 - All Bank Accounts in One App

UPI integrates all bank accounts in one app eliminating the need to keep multiple bank apps to manage multiple bank accounts. In addition, it simplifies the payment job for users significantly.

#3 - Virtual Payment Address (VPA) to Customer

The customer gives a virtual address eliminating the need to enter the details such as account and card numbers while making payments. The money is sent or received in the user's bank account mapped with this virtual address. Users can also send money using the QR code, which has an inbuilt virtual payment address.

#4 - Single Click 2-Factor Authentication

It provides two-factor authentication for the safety of users, merchants, and banks.

The user needs to follow several easy steps to register for full form of UPI transaction:

Step #1 - App download:

The user downloads a UPI app from the app store. There are several UPI apps available which a user can use for his banking transactions. Banks also offer UPI (Unified Payments Interface) on their apps to keep the customers hooked on to their apps. However, third-party apps are more popular than bank apps for UPI transactions.

Step #2 - Create Profile:

After downloading the app, the user creates a profile putting in his basic details like name and mobile number and picks up a virtual payment address and a password.

Step #3 - Add Bank Account:

Under this step, the user adds his bank account using his linked mobile number. To add accounts, the user should have his mobile number linked to his bank account. Users can not add bank accounts that are their own but not linked with their current mobile number.

• While requesting to link his mobile number, the user gets a One time password (OTP) on his registered mobile number. Then, the user prompts to enter the last six digits and expiry date of his debit card issued by his bank.
• The user enters the details and the OTP. The user then enters his preferred UPI pin, which they prompt to enter twice. Once this is complete, the user's full form of UPI transaction generates.

To perform a UPI (Unified Payments Interface) transaction, follow the following simple steps.

1. Choose a Mobile Number, an Account, or a Merchant to Pay

   
   UPI payments can be made to another user using his mobile number, a bank account using the account number and IFSC, and merchants by picking the ones available on the app or scanning QR codes.

2. Enter the Amount

   
   The user has to enter the amount he wants to transfer, or else there's an existing bill payment due. The amount may come prefilled, and the user can change the prefilled amount before the transfer.

3. Select the Bank Account

   
   The user gets to select the bank account he wants to make the transfer. This selection happens in the final stages of the transaction.

4. Enter the UPI Pin

   
   The user puts in the UPI pin to make the transaction. After entering the right UPI pin, the transaction completes, and the transfer initiates, completing it within seconds.
   
   The user gets an SMS from the bank about the transaction once the payment is successful.

Let us understand the concept of full form of UPI code with the help of a suitable example.

Jane wants to do make payment for purchase of dress, using the UPI method. She has installed the UPI enables mobile banking application and select the payment option. She enters the UPI id or the mobile number of the shopkeeper or scan the shopkeeper’s QR code. The app displays the name of the shopkeeper to confirm the recipient. Then Jane will enter the amount she s supposed to pay for the dress.  

Next, to authenticate the transaction she will have to enter the UPI PIN provided by her bank and complete the transaction. When the authentication is successful, the app confirms that the payment is done, and the amount will be debited form her account. The recipient, which in this case is the shopkeeper, gets a notification of receiving the payment.

Thus, in the above example, the payment is made using the UPI method. The entire process is secured and fast between banks.

• Most applications do not charge for UPI transactions on their platform.
• Most banks also are not charging anything to their customers for transactions.

While the transactions are free for now, banks and apps are stipulating a possible fee for the transactions. However, these charges, whenever they will come, will still be lower than many other forms of payment that are used commonly in day-to-day lives.

UPI is essentially a digital transaction mode and is better than cash. The ability of UPI to put all bank accounts under one app also makes it better than cards. In addition, a one-click transfer without charges makes UPI a highly adoptable proposition for banks and customers alike. It is beneficial for merchants, too, as it gives them a mode to collect payments without paying transaction charges, which are the norm with debit and credit card transactions.

Overall, it is not only time saving and hassle free, but also a huge step towards a technologically advanced economy. Only a mobile number is required for the method, which should be registered with the banks along with a stable internet connection. It is also highly secured since it has to be authenticated using a PIN or biometric authentication. There is no need to carry around cash or card, which has the risk of getting lost or spoilt.

Another important factor is that it can be traced easily since it is digital. The sender and receiver, both will have a payment history for the transaction.

However, internet accessibility is definitely as issue since many remote parts of a country may not have a stable and proper internet connection, thus, forcing people to use either cash or card. Thus, both UPI and cash or card has their own benefits and limitations. But definitely UPI is gaining importance steadily.

This article guide to what is Full form Of UPI. We explain its features, how to register, create and perform transaction, with example & charges. You may refer to the following articles to learn more about finance: -

• Full Form of INR
• Prepayments - Example
• Full Form of NEFT
• IMPS Full Form