Unified Payments Interface (UPI)

Instant payment system developed by the NPCI
UPI is built over the IMPS infrastructure
The different channels for transferring funds using UPI are:
- Send/Collect through Virtual ID
- Account Number + IFSC
- Aadhaar Number
Single mobile application for accessing different bank accounts.
Transactions are carried out through mobile devices with two factor authentication using device binding and a UPI PIN as security.
Customer not required to enter the details such as Card no, account number, IFSC etc.
Registration of Beneficiary is not required for transferring funds through UPI as the fund would be transferred based on Virtual ID/Account+ IFSC/Aadhaar Number.
Earlier customer was allowed to link only bank accounts, now customer can link PPI Wallets as well in UPI.

Increase in UPI transaction limit for specified categories

Present status: The NPCI has set an upper limit on the UPI transactions. Presently, the upper limit is Rs 1 lakh per transaction in most of the cases. However, in certain specific cases such as investment in capital market through Initial public offer (IPO), the upper limit is Rs 2 lakh per transaction.
New announcement: RBI has proposed increasing the transaction limit for payments made through UPI for the Retail Direct Scheme and initial public offering (IPO) applications to Rs 5 lakh from present Rs 2 lakh.

NPCI has upgraded the UPI with enhanced features.
- Linking of overdraft account – Apart from the savings and current accounts, the UPI users can now link their overdraft account to it.
- One-time Mandate (account blocking) – It allows customers or merchants to pre-authorize a transaction and pay later.
- Security Layer in QR – The app allows the users to scan the QR code and check the authenticity of the merchants through notification to the user to ascertain the information.

Rationale: UPI works only on smartphones with Internet connection. Does not work on Feature phones. Earlier, for the benefit of feature phone users, NPCI had launched a separate platform known as National USSD Platform (NUUP), which is based on UPI. However, NUUP has not been very successful. Hence, even today, 40 crore Indians who use feature phones have not able to benefit from UPI.
Details about UPI 123pay: Works on both feature phones and Smartphones (without Internet). Developed by NPCI.
Registration
- Step 1: Users need to register with UPI 123PAY by linking their bank account.
- Step 2: Users need to create UPI PIN by entering last 6 digits of their Debit Card.
- Step 3: User is ready to do transactions.

Nature of Transactions: Transfer of Money + Bill Payments + Payments to Merchant + Check Account Balance etc.
Mode of transactions
- IVR (Interactive voice response) number: Dial Toll Free number--> User is presented with host of options--> Chose specified option by pressing specified number on Keypad--> Complete transaction by entering UPI PIN.
- Missed Call Approach: Merchant enters the transaction details along with the customer's mobile phone and amount--> Customer gives missed call on a specified number--> Customer gets a call--> Customer enters UPI PIN to complete the transaction.
- App Functionality Approach: Payment system providers can enter into agreement with the feature phone manufacturers for the pre-installation of payment Apps. These Payment apps can then be used to make payments without the need of Internet.
- Proximity sound-based approach: Enables sound waves to enable contactless, offline and proximity dated data communication between merchant's device and user's phone. Developed by Tonetag.
Limit on transaction
- Per Transaction Limit: Rs 5000
- Per Day Limit: Rs 1 lakh.

It is a new payment solution to process low value transactions using money stored in UPI Lite wallet without the need for an internet connection. Developed NPCI.
Near offline mode: While payments from UPI Lite wallet can be done without internet (offline), credit in the wallet can be done only in online mode currently. However, later, UPI Lite will process transactions in completely offline mode.
It is intended to be a customer-friendly approach to enabling low-value transactions without utilising bank's core banking systems in real-time.
Requirements
- To use UPI lite users must be on UPI App. Any user of UPI app will have the option to enable UPI Lite called 'On-Device Wallet' in their UPI App. Once enabled, users can allocate funds from their bank account to UPI lite.
- At present, only debit from UPI lite balance will be permitted. Credits to UPI lite (including refunds etc.) will be processed online in user's bank account.
- Limit of UPI Lite Balance: Rs 2000 (Funds can only be added in online mode using Additional Factor Authentication (AFA) or UPI Autopay feature.
- Max transaction allowed using UPI Lite: Rs 200.

UPI based payment interface that allows real time fund transfers using a single identity like your mobile number or name.
Functions
- Transfer and receive money from any person using UPI
- Pay bills on merchant websites with UPI
- Book flight tickets or recharge your mobile
- Scan a QR code to make quick payments

NPCI International Payments Limited (NIPL), the international arm of National Payments Corporation of India has recently said that Nepal has now become the first country outside of India to adopt UPI.
Prior Developments:
- Before this, NIPL has also forged partnerships in Singapore and Bhutan for accepting UPI QR-based payments. The partnership with Singapore's PayNow also allows cross-border payments. NIPL had also tied up with UAE's Mashreq Bank to enable Indian travelers to pay for their purchases using UPI.
How is it different in case of Nepal?
- Nepal partnership will enable the creation of UPI real-time-based payment system in Nepal. Nepal will have its own UPI, own apps, with their own banks like India.

One-stop ecosystem for payment of all bills like electricity, telecom, DTH, gas, water bills, etc. and other repetitive payments like insurance premium, mutual funds, school fees, institution fees, credit cards.
Transaction can be initiated through multiple payment channels like Internet, Mobile-Banking, Mobile Wallets, Kiosk, ATM, Bank and Business Correspondents
The NPCI has been authorized by Reserve Bank of India (RBI) as the Bharat Bill Payment Central Unit (BBPCU). It is responsible for setting standards, rules and procedures for all participants. The BBPCU also undertakes clearing and settlement activities related to transactions routed through BBPS.

Incorporated as company in April 2020. It is a wholly owned subsidiary of National Payments Corporation of India (NPCI).
NIPL is devoted for deployment of RuPay (domestic card scheme) and UPI (mobile payment solution) outside of India.