Full form of UPI is Unified Payments Interface and it has become the fastest growing method of transferring money online. UPI is a bank-to-bank account settlement mechanism run by the National Payments Corporation of India. A recent article in the Economic Times of India, claims that UPI transactions have crossed 3 crore transactions monthly. That is 10 Lakh transactions daily! That is a very high number for a Banking system, which running quite mechanically until the last decade. UPI is now supported by the best digital wallets in India which has been contributing towards the growing popularity.
This article has been written by Gaurav Fulmali who is an ardent user of digital wallets and does not miss a chance to earn some rewards.
To put this into perspective, for the month of April and June 2018 – The IMPS (Immediate Payment Service) made only 10000 transactions. Compare that to the UPI Transactions data, which rose to an unbelievable 3.12 crore transactions in August alone. There is no doubt that UPI is spreading like wildfire and is the go-to service for the average Indian banking customer with a smartphone in their hand. You can even rent a self-drive car using UPI.
The UPI trend has also emerged as a battleground for National and International Tech giants. It has attracted the likes of Silicon Valley giants such as Google, Facebook, Whatsapp and even given birth to a slew of Indian Startups such as Paytm, PhonePe and many more. Since the platform allows third-party applications to collaborate with banks and process consumer transactions these tech Giants have locked horns for a larger share of the pie. To put this into perspective, PayTM digital wallet alone was valued at $10 billion this year with other international investors such as China’s Alibaba and Japan’s SoftBank pouring in billions in such service providers.
So what is UPI then?
It sounds like a magical solution India had been waiting for all along. No lengthy and boring queues at the Bank. No more dependency on that annoying Clerk who would seem to pass judgement based on how much money you withdraw or deposit. Financial independence and information all at your fingertips.
Remember that bump in the road at the end of 2016, which jolted the Indian Consumer towards going Digital with their money?
UPI is the Whatsapp for your money, this is what Shikha Sharma, managing director and CEO of Axis Bank quoted to explain it simply. It is a unique identifier that your bank uses to transfer money and make payments using the IMPS (Immediate Payments Service). IMPS is faster than NEFT and lets you transfer money immediately and unlike NEFT. It works 24×7! This makes Online Payments faster and easier while not requiring a digital wallet or credit or debit card.
Why Use Unified Payment Interface (UPI)?
The need for UPI has been a long time banking problem that needed a solution. Firstly, there is the most convenient need to not carry a lot of cash around. It may mean fat wallets or the risk of getting your money stolen. Secondly, it offers instant money transfer and also the feature to request it. You can always keep track of your money and get a detailed update on your banking transactions. The best of all the reasons is the fact that UPI services work even on Weekends and Holidays, thus avoiding the limitations of a traditional banking system.
How does UPI Work?
Src – http://digitaluncovered.com/unified-payment-interface-works/
- Download the App for UPI – Pick one from the list below
- Do registration online on the App with a/c details
- Create a virtual payment address (VPA) – A VPA is a user ID generated by UPI apps and can be customized by the customer. It works as a digital address which is joined to your account and through which you may carry out all your transactions. It works as an extra layer of security.
- Set MPIN
- Wait 5-7 minutes
What is required for Transaction:
1. A Smartphone with internet facility
2. Registered MPIN
What are the Advantages of using UPI?
Low Charges – IMPS and NEFT charge a huge fee for every transaction. UPI payment systems reduce these fees to a bare minimum.
Instant Transaction – UPI transactions are Instant and take effect immediately. This is reflected in the Accounts of the Payer and Payee where the transaction is updated in real time.
Skip pesky details – UPIs don’t require filling in the Payer/Payee details. With QR and Phone number connected accounts, the transactions can be done with the help of the camera.
Skip registration – QR codes and phone number connected accounts make registering the Payee a thing of the past.
Disadvantages of UPI?
Transaction Limit – UPIs currently have a transaction limit which is monitored and controlled by the rules pertaining to the government. These rules may get changed or updated/
The requirement of Internet and Smartphone – Despite being a Banking solution, it is heavily dependent on Digital resources instead of the traditional Pen and Paper counterparts. This also leads to a difficulty getting non-tech-savvy people abroad the UPI train.
Difficult to Convince the Customers – Although UPI promises high security and transparent transactions, Customers still hold apprehensions of getting defrauded or getting hidden charges. This makes it difficult for the Service providers to convince people to transition into the technology.
Top 10 UPI Apps and Services
Based on the features, customer preference and the ease of accessibility, we have compiled a list of 10 best UPI apps which definitely deserve to be on your smartphones. Here they are below:
1. Google Pay (TEZ)
Google Pay (Formerly known as Tez app) has been consistently the number 1 choice of the Indian consumer. Launched in September 2017 Google Pay has already seen 55 million downloads, 22 million active users, 750 million transactions. Some key reasons why Google Pay is best app for UPI based transactions:
- Easy to use features and secured by the robust Google-backed encryption systems.
- Loyalty and reward programs to keep the consumer coming back for making
- handy and well thought of banking features is what earns this app the best spot when it comes to UPI service.
Offer – Install Google Pay now and get Rs.51 on your first transaction. Use this link.
Bharat Interface for Money (BHIM) is an initiative to enable quick and reliable cashless payments through your mobile phone. BHIM was the answer to the Demonetization situation back in 2016, developed by the National Payment Corporation of India (NPCI) as a part of the Digital India initiative. Some key features:
- Interoperable with other Unified Payment Interface (UPI) applications & bank account.
- Mandatory requirement to attach your Aadhar card to your UPI service app.
- With aadhar cards being able to be attached to multiple Bank accounts, BHIM took the initiative to attach multiple bank accounts to your UPI app.
- One-stop solution for QR code payments, sending or receiving money and the ability to check your Bank details at any given point in time
Getting a huge boost and backing from the government in terms of endorsement and advertising, BHIM was on the lips of every Indian. It even cracked the language barrier to become the most downloaded and used app in the Indian market., BHIM is the.
PayTM, which propagated as an Indian Startup soon turned international when it received a mega boost in 2017 when Alibaba backed it pushing it past the $10 billion valuation mark. PayTM is no longer the Digital wallet it started as. The pioneer in sales, it expanded it’s role as a shopping mall, a bill payment service, a delivery service and even a ticket booking service. Some notable features:
- Not only can you create a digital wallet, but you can also generate a UPI code to send and receive money.
- Connecting all the features of a good UPI app, PayTM integrated it with a shopping service and a payment processor.
- Lucrative rewards and loyalty program made it viral across the Indian market, beating the reach of banks, ATMs and POS machines.
- QR codes available at every major outlet making it easy for the customer to find a PayTM accepting outlet
Although PayTM will charge 4% for the transactions, the rewards, discounts and loyalty programs compensate them and will leave you smiling excitedly making it a hot favorite app among the users.
Acquired by Flipkart in 2017 and linked with freecharge’s digital wallets, PhonePe is spreading like a storm. Apart from paying the merchant with UPI or receiving payments, you can also do a lot of different tasks via the app:
- Recharge any mobile number, pay for the postpaid mobile connection, pay landline, electricity or water bills in different states and pay for the associated insurance companies.
- the transaction charges are zero for both sender and receiver so the additional cost will not apply.
- secure, robust and easy to use an app with loyalty and rewards program
Offer – Get upto Rs.1000 for your PhonePe transactions if you are a new user. Use this link.
How does the power of a payment app combined with your go-to social networking app sound? I know right. GENIUS! With 1 million active users in the Indian Market, Whatsapp rolled out it’s new feature with a new update in 2017. Most users were not even aware of the feature until recently. Although it hit a few technical snags with clearance and permits, it successfully partnered with a top Indian bank and removed the Beta testing title from its name.
- promises a ton of ease and no need to download a separate UPI app for monetary transactions. Pay using your whatsapp app itself.
- lacks the kind of cashback offers and discounts that it’s rivals are offering.
Mobikwik began as a recharge portal for prepaid Mobile telephone service providers. However, in 2013 it was approved as a digital wallet and coming 2017 it even became UPI enabled service provider.
- easy to use with a very user-friendly app.
- has SuperCash feature, which is basically a point system for scoring cash-backs, discounts and other such offers.
Offer – User referral code FTC3MN to get Rs.100 when you add Rs.20. Install MobiKwik now
Despite being taken off the Play store for a relaunch, Chillr definitely deserves a spot on this list. Recently Chillr has been taken over by Truecaller as their entry into the Ecommerce and Digital transactions domain. Truecaller owns a whopping 150 million Users of the Indian diaspora. It is projected to be the next PayTM upon its launch which can be anytime soon. It’s eagerly awaited and Truecaller also plans to launch it with a series of attractive offers and discounts.
8. iMobile by ICICI Bank
ICICI bank has been one of the early adopters of UPI and integrated the technology into their mobile app iMobile for a seamless experience. They have combined all banking features along with UPI under one app for its bank users.
- Integrated in the mobile app making it easy to use for all ICICI Bank users.
- Allows creation of multiple Virtual Payment Addresses (VPA) making it easier to track payments.
- No fees for using UPI
9. SBI Pay
Since particular Bank apps require the customer to also have a bank account in the same bank, we tried not to add any particular bank based apps. However, SBI pay stood out in this regard. SBI Pay is a digital payment app that provides its customers the Unified Payments Interface (UPI) facility, along with other features and benefits.
- this app is used even by non-SBI customers to send and receive money through UPI and also for other types of peer-to-peer transactions.
- specially designed to support the UPI interface and will, therefore, allow any UPI account holder to send and receive money without account number, IFSC code or debit card details.
- Fund transfer is initiated through the Virtual Payment Address (VPA).
- SBI pay app allows on the go payments and transactions with attractive rewards points and offers.
Axis bank’s app is another UPI app that seems to be in demand. Axis app, just like the ICICI and SBI pay app, combines the features of a Banking app and a UPI service app.
- along with UPI services access your bank account banking services such as FD, RD, Forex and DEMAT.
- non-banking customers will not be able to use the full features.
Special discounts, offers and promos using UPI
1. Transaction-based offers
Transaction-based offers basically reward to continue using the app. UPI apps provide and an assortment of cash back, discounts and loyalty points for simply making transactions on their app. For instance, Google Pay recently started a promotion where it offers lucky customers to win up to Rs 1 lac. All such promotions and offers are available on the UPI service website for more details.
2. Coupons/Discounts on goods/services
PayTM is one of the UPI services which also allows E-commerce purchases. Its why it offers a variety of coupons and discounts on its catalog upon usage. From shopping to recharges up till paying bills, you may use these coupons wisely to avail hefty discounts and rebates.
Now that you are familiar with the top picks in the industry, wait no more. Grab that smartphone and start making downloads. Let us know which of these apps is one of your favorites and why and perhaps even point out one of the features that we missed in our take on it.