The popularity of mobile applications has grown multiplefold in recent times. The reason is their flexibility. You do not need an extensive set-up to use a mobile application. You only need your mobile phone and a good internet connection. Furthermore, it lets you do whatever you want by simply using your fingertips. This saves time and makes life much simpler. Mobile applications have been a big hit in the banking and financial world.

Almost every leading bank today has a mobile banking application. Several banks and payment service providers have also developed mobile payment applications, allowing you to make secure and seamless payments on the go. UPI is a concept you should know about if you use a mobile payment application. Let us learn what is UPI and the benefits of using it.

What is UPI?

UPI stands for Unified Payment Interface. It is a real-time payment system launched by the Reserve Bank of India in collaboration with the National Payments Corporation in India. It lets you transfer money between accounts using smartphones. There are two critical aspects of UPI: UPI ID and UPI PIN. UPI ID is a virtual payment address created when you register as a user on the mobile payment application.

It looks much like an email address and typically includes your name@bankname. The UPI PIN is a unique four-digit PIN you need to enter to facilitate a transaction. Having both a UPI ID and PIN is necessary to make a transaction through a mobile payment app. Let’s take a look at an example to understand how does UPI work with these two elements.

Suppose you wish to send money to your college-going sibling in order to help him throw a birthday bash for his friends. In that case, you should obtain your brother’s UPI ID. Enter the UPI ID into the mobile payment app. Feed in the amount you wish to transfer to your brother, and then enter the UPI PIN to facilitate the transfer. Your brother will receive the amount instantly in his Bank Account and enjoy his birthday to the fullest.

What are the benefits of using the UPI?

Here are the many benefits of using a UPI:

• No bank details shared – By now you would have a fair idea of what is UPI payment and how it works. You do not need to share or obtain Bank Account details to make a transaction. You simply need to know the UPI ID to make the transaction. This keeps your Bank Account details secure and cuts down on many hassles.

• Secure and seamless – UPI allows you to make secure and seamless transactions. This means you can transfer or make payments to anyone without any apprehensions.

• Free of charge – You can use the UPI payment apps to make transactions without paying a single penny. This means convenience does not come at a cost.