History of UPI
After the formation of the National Payment Corporation of India in 2009, the RBI found out that in India, only six non-cash transactions happen per individual citizen every year along with 10 million retailers accepting card-based payments. Apart from this, the RBI was also keen on tackling black money and corruption. To get rid of this, reducing cash transactions is the best possible method.
India was also keen on introducing the Green Initiative to decrease the usage of paper. Along with making payments environmental-friendly, it was also trying to make payments more inclusive, accessible, and authorized. A combination of all these reasons led to the launch of the UPI payment system in the year 2016. UPI has grown exponentially in India, placing it as the largest real-time payment market. According to reports, the annual transaction in 2020 alone through UPI was 25.5 billion.
How Does UPI Work?
This mode of digital payment helps you to transfer funds without the usage of an account number, name, IFSC code, or other bank details. Rather, it uses a UPI id. However, to transfer money using this, you will need a valid bank account, an active phone number, a smartphone, and also a stable internet connection. Your phone number should be mandatorily linked with your bank account. Once you have these things set up, you can download one of the UPI apps, generate a pin that you will remember, and use it whenever you want. UPI transactions have a daily transaction limit.
The good thing about UPI payments is that it sends money to another user without revealing your bank account details. These transfers can be done at any time of the day, making this convenient and user-friendly.
The UPI payments have put India at a high pedestal among various global bystanders. It is important to know in detail about the full form of UPI. You can use this to build knowledge or even while preparing for banking exams.
What Are The Advantages Of UPI payment?
- This method of payment is available almost at any time of the day.
- The payments happen immediately unlike other NEFT payments that can take up to 12 hours.
- Through this method, one can send and receive money almost immediately.
- It allows one to transfer money without displaying the sender or receiver’s bank details. It also doesn’t require difficult-to-remember details such as IFSC code, account number, etc.
- This is the cheapest mode of money transfer. It is also fast and hassle-free.
- There is no need to store any sensitive information when making a UPI payment.
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