UPI (United Payments Interface) – Understanding its features and facets



After ‘Amazon’s UPI payment acceptance’, we now have WhatsApp allowing payments via UPI.  The e-commerce major now allows customers to register via a UPI enabled smartphone. Payments can be made on Amazon using the customer’s respective UPI ID. This payment method is available via the Amazon mobile app and for values up to Rs.10,000 or less.


WhatsApp & UPI

One of the world’s most widely used messaging service; WhatsApp has decided to feature UPI as a means to send money to family and friends, directly from WhatsApp. This decision by WhatsApp is set to send shockwaves across the digital economy domain, with the effects experienced by players, such as Google Tez and PayTM, which have dominated this segment for long.

With close to 200 million users in India, WhatsApp will have no trouble in creating a database for WhatsApp UPI Payments. The WhatsApp Payments feature is now being rolled out to both Android and iOS users.

The WhatsApp Payments will involve a P2P (peer-to-peer) structure and not a merchant payment option for now. Both sender and beneficiary must be running the latest version of WhatsApp and must have WhatsApp Payments enabled. The WhatsApp numbers being used by both the transacting parties should be linked to their respective bank accounts with UPI support, as well.

Users, who have already received this feature, need to activate it by selecting ‘Payments’ from their Settings option. Then select ‘Send and receive money securely with UPI’. Finally, ‘Accept and Continue’. Verification via ‘SMS’ will follow. Next, add your bank from a list of 70 odd banks. New users are also allowed to create a UPI account with a pin acting as authentication for the payments.

To start with the transaction, simply select the contact, select a bank account and the amount. Next, enter the pin and send the amount. You are then notified regarding the transaction by WhatsApp and you can keep track of your transaction history by viewing the ‘Payment History’ option.

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



What is United Payments Interface?

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 and payment confirmation. UPI is a system designed to provide a simple, secure and convenient ‘single interface’ to enable sending and receiving of money using smartphone, 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.


Features of United Payments Interface

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 a 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 United Payments Interface

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.


United Payments Interface 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 & 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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