Loan Singh Answers – What is UPI or Unified Payments Interface?



It was reported a few months ago that Airtel Payments Bank had integrated ‘Unified Payments Interface’ onto its platform. This allowed Airtel’s customers to make secure digital payments and fund transfers. This also made Airtel the first payments bank in the country – to integrate with UPI. As per Dilip Asbe, the Chief Operating Officer at National Payments Corporation of India (NPCI), “Payments banks are capable of facilitating remittances and payments to a large user base especially to the underserved area as per RBI’s vision”.

Let’s understand more about UPI and how it is impacting the digital payments in India.


What is UPI?

Unified Payments Interface, or UPI, is a single window mobile payment system created by National Payments Corporation of India (NPCI). It is regulated by the Reserve Bank of India which facilitates the instant fund transfer between two bank accounts, over a mobile phone network. Any bank can use UPI by integrating it into their existing smartphone applications. Banks can also develop their own UPI app.

The objective of UPI is to offer architecture to facilitate online payments – thanks to the smartphone boom. It is expected to improve instant payments via mobile – providing security and convenience. This security is to be achieved using facets such as Aadhaar integration, secure credential capture, 1-click-2-factor authentication (one-click transaction which is authenticated at two levels), phishing protection and Virtual Payment Addresses. UPI thrives to make the application as simple to use as making a call from your phone. UPI needed to be innovative in such a way that both the payer and payee stay on their smartphone, taking advantage of newer authentication services and enhancement in mobile devices. UPI needs to be scalable to billion users and also be adoptable by the Indian population.

Anyone who uses a smartphone, and operates a bank account, can benefit from UPI either for transferring or receiving money. Currently one needs a bank’s IFSC code to be an identifier of your financial information, but with UPI all you need is a virtual address – that is unique and conceals your financial information.

UPI is built over the Immediate Payment Service (IMPS) facility for transferring funds using a virtual payment address, account number, mobile number, Aadhaar and MPIN (Mobile banking Personal Identification Number). These are required for customer verification & payment confirmation. UPI is a system designed to provide a simple, secure and convenient ‘single interface’ to enable sending and receiving of money using smartphones, via a ‘single identifier’. The identifier can be a virtual address like an email ID, mobile number or Aadhaar.

UPI enabled banks are those which facilitate fund transfer through the UPI payment system. These banks let their bank accounts to be linked with the UPI based app. If you, as a bank customer, link your account to the UPI app, the bank would then be your UPI enabled bank. UPI consolidates and integrates multiple systems with varying service levels into one nation-wide platform for all retail payment systems.

In total, there are 3 types of UPI enabled banks based on the function they perform. They are

Banks with UPI app

Most banks fall in this category. These banks have either developed a new UPI app or have integrated the UPI in their existing mobile apps. Examples of banks with their own app are ICICI Bank, Axis Bank, State Bank of India, HDFC Bank, PNB Bank, etc.

Banks without an UPI app

Some banks have neither developed its own UPI app, nor partnered with a third-party app. The Bank of Baroda is one such example.

Banks with Third party UPI app

Some banks have lent their UPI system to other mobile app developers. Yes Bank is one such bank, and has partnered with several third parties.

There are 29 banks that are currently UPI enabled. The account holder of these banks can send and receive money through the UPI payment system. However, only PSPs (Payment Service Providers) can issue the VPA (Virtual Payment Address). The VPA is used instead of the bank account. The UPI app can issue a VPA to any of the account holders of these banks. These 29 banks are

  • State Bank of India is a PSP and an Issuer. The name of their app is SBI Pay
  • ICICI Bank is a PSP and an Issuer. The name of their app is iMobile
  • HDFC Bank is a PSP and an Issuer. The name of their app is HDFC Bank Mobile Banking
  • Andhra Bank is a PSP and an Issuer. The name of their app is Andhra Bank One
  • Axis Bank is a PSP and an Issuer. The name of their app is Axis Pay
  • Bank of Maharashtra is a PSP and an Issuer. The name of their app is MahaUPI
  • Canara Bank is a PSP and an Issuer. The name of their app is eMpower
  • Catholic Syrian Bank is a PSP and an Issuer. The name of their app is CSB UPI
  • DCB Bank is a PSP and an Issuer. It has no UPI App
  • Federal Bank is a PSP and an Issuer. The name of their app is Lotza
  • Karanataka Bank is a PSP and an Issuer. The name of their app is KBL-Smartz
  • Punjab National Bank is a PSP and an Issuer. The name of their app is PNB UPI
  • South Indian Bank is a PSP and an Issuer. The name of their app is SIB M-Pay
  • United Bank of India is a PSP and an Issuer. The name of their app is United UPI
  • UCO Bank is a PSP and an Issuer. The name of their app is UCO UPI
  • Union Bank of India is a PSP and an Issuer. The name of their app is Union Bank UPI
  • Vijaya Bank is a PSP and an Issuer. The name of their app is Vijaya UPI App
  • Oriental Bank of Commerce is a PSP and an Issuer. The name of their app is OBC UPI
  • TJSB is a PSP and an Issuer. No app for now.
  • IDBI Bank is an Issuer. The name of their app is PayWiz
  • RBL Bank is an Issuer. No app for now.
  • Yes Bank is a PSP and an Issuer. The name of their app is Yes Pay Wallet and PhonePe
  • IDFC is an Issuer. No app for now.
  • Standard Chartered Bank is an Issuer. No app for now.
  • Allahabad Bank is an Issuer. No app for now.
  • HSBC Bank is an Issuer. No app for now.
  • Bank of Baroda is an Issuer. The name of their app is BarodaMPay
  • Kotak Mahindra Bank is an Issuer. The name of their app is BHIM Kotakpay
  • IndusInd is an Issuer. The name of their app is IndusPay


Features of UPI

UPI allows a customer to pay directly from a bank account to different merchants – offline and online, both.

UPI does not involve the hassles of typing in account details, IFSC codes or net-banking /wallet passwords every single time you want to initiate a transaction.

  • UPI is also being provided as an USSD. Users can access the service by dialing the code ‘*99#’.
  • The interface was intended to enable Peer-to-Peer (P2P) immediate payment via a single click two factor authentication process.
  • It is expected to facilitate push (pay) and pull (receive) transactions, and even works for payments via barcodes.
  • UPI is also envisaged to aid in multiple recurring payments for salaries, utility bill payments, school fees, etc.
  • UPI is safe for customers as they only share a virtual address and do not have to share their personal information for each transaction.
  • It is open sourced, cheap, secure, reliable and instantaneous
  • Currently, prepaid wallets cannot support more than Rs.20,000 worth of transactions in a month. But, a UPI enabled bank account can transfer up to Rs.1,00,000 per transaction.
  • Better accessibility because one mobile application can be linked to different bank accounts
  • Complaints can be raised directly from the app


Getting Started with UPI

The steps to set-up UPI on your smartphone are simple. All you need to do is

  • Download the UPI app from an app store and install it on your smartphone
  • Set an app login ID
  • Create a virtual address
  • Link it to your bank account
  • Set an MPIN
  • Start transacting using UPI
  • You can use the app for payments towards online goods or services. For Example: to pay for a product via the UPI app, you click on the product to buy, the app triggers the UPI payment link, you are re-directed to the pay screen of the UPI app where the transaction information is verified and a click, followed by entry of a secure PIN; completes the purchase.


UPI enabled Apps


  • Available on both – Google Play Store and Apple iTunes
  • Developed and released by NPCI
  • Simplest and fastest among the available UPI apps
  • Great user experience in accessing services such as Send and Request money, change UPI PIN, generate QR codes, etc.


  • Available on both Google Play Store and Apple iTunes
  • Secure and easy to use
  • Transactions can be completed in 3-4 steps
  • Features contain balance enquiry, change of UPI pin, send & request money.

Axis Pay

  • Available on both Google Play Store and Apple iTunes
  • Perhaps the cleanest interface out of all the UPI apps
  • Only Send money and Request money options show up on the home screen.
  • Security provided via a 6-digit app password.
  • 5 steps are involved for sending money.

PhonePe App

  • Available on both Google Play Store and Apple iTunes
  • PhonePe app not only acts as a UPI app, but also as a mobile wallet.
  • It has a smooth and clean interface.
  • Allows transaction related services such as Send & Request money, change UPI Pin, etc.
  • PhonePe app also allows payment of bills.
  • Available in 8 languages

eMpower App

  • Available on both Google Play Store and Apple iTunes
  • Good interface with feature to upload customer picture.
  • Allows sending of money via virtual payment address, and also via Aadhaar.
  • A slower app compared to the others, with multiple authorization steps


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