If someone told you a couple of years back that you could transfer money with just an email id in future, you would have possibly thought it to be a wild idea and dismissed it. Thanks to the advent of unified payment interface (UPI), money can now be transferred from one account to another by just typing a unique id which resembles an email id. The unique id is allotted to you by your bank.

How does it work? UPI uses the IMPS (immediate payments system) and facilitates instant money transfer. The facility is available round the clock. IMPS is definitely faster than NEFT and allows you to transfer money immediately. UPI is an advanced version of IMPS itself . It scores over the latter on three counts. First, UPI enables seamless transfer of money — all you need is the unique id to complete the transaction.

To transfer money using IMPS through internet banking, you need to add a beneficiary for which details such as account number and IFSC code are required. Similarly, in case you wish to use your mobile to facilitate IMPS, you need to add a beneficiary and provide his/her mobile number and the seven-digit mobile money identifier number (MMID). And to add a beneficiary, it takes anywhere between 30 minutes to six hours; this varies across banks.

You can transfer up to ₹1 lakh per transaction using the UPI platform whereas the IMPS limit is Rs 2 lakh per transaction.

Second, using UPI, you can transfer money or receive money from multiple banks using the same mobile app. You can now withdraw or pay into account with any bank using the same app. Prior to the launch of UPI, to facilitate transfer through IMPS, one would have to download the respective bank’s mobile banking app. And if you have had multiple bank accounts, you would have to download multiple mobile banking apps. UPI saves you the hassle of using multiple apps.

Push and pull facility Three, UPI not only facilitates ‘push’ transactions — where one can send money through the virtual address — but also offers ‘pull’ facility, through which you can remind and request payment from those who owe you money. All you need to do is to log into the UPI app and enter the remitter’s/payer’s virtual id, amount and the account to be credited.

Once you confirm the payment details, the payer will get the notification and payment request on his mobile. Once the payer clicks on the notification, he is automatically directed to his bank’s UPI app where he can review the payment request. The payer can choose to accept or decline the payment request.

While UPI does score over IMPS/NEFT on the ease use, how about security? The virtual id is far more secure as the data is encrypted and there is a two-factor authentication which is done using a MMID.

Also, details such as bank account are not shared with anyone and this is unlike other payment modes such as credit card where confidential data such as card number and CVV are shared with the merchant.

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