After the demonetisation debacle, we were all cast willy-nilly into the world of digital payments, whether we liked it or not, found it convenient or not. At the time I tried using PayTM, because many small traders did not accept credit card payments; finding them expensive and cumbersome to set up. However, I found PayTM to be clunky and annoying to use. More recently I tired Google Pay. I found it so convenient and user friendly that I found was spending more than I realised. I also realised that I did not understand how Google Pay and other UPI payments work. I did some reading and this is what I understand about how it all works:
It stands for Unified Payment Interface. The NVPI (National Payments Corporation of India) developed this payment system to help users instantly transfer funds from their bank account to that of another user. Payments can be made using a VPA (Virtual Payment Address), mobile phone number, bank account number along with the IFSC code, an individual’s Aadhaar number or by scanning a QR code. Even if the receiver does not use UPI, payment can be made to them using their bank account number and IFSC code.
Setting up UPI is fairly simple and takes just minutes. Once you set it up, payment is quick and easy – just a few steps completed in a few seconds. The UPI system of payment can be used only from one's registered mobile; from the phone number linked to one's bank account. So, even if you're making a digital payment from your desktop and choose the UPI option, you will be able to complete that payment only from your smart phone. Obviously if one doesn’t have a smart phone, the UPI payment option is not open to them.
Airtel, Amazon, BHIM (the NCPI’s own payment app), Google Pay, Jio Pay, PhonePe, PayTM, Samsung Pay and WhatsApp Pay are some options that can be used for UPI payments. Many banks have their own payment apps such as MobiKwik from HDFC, Mi-Pay from ICICI and so on. UPI can be used for online shopping, paying for cabs, food deliveries, groceries and other stores. You can and even to pay the plumber or electrician for work they do in your home – as long as they have a bank account number.
For sheer speed and convenience, UPI is tough to beat. Paying via credit card is tedious: filling in that long credit card number, CVV and then waiting for and entering an OTP in many cases. Adding a beneficiary into one’s bank account is even more tedious. It takes a day or so for the beneficiary to be added before you can transfer funds from your account to theirs. On the other hand, UPI is quick and easy. You scan a QR code or pay via any other VPA (this can be a number or may be one’s name as it occurs in the account along with the bank name with a @ symbol in between). Now you specify the amount, enter your secret four-digit pin and you're done. A receipt is generated instantly which you can share with the recipient if need be.
Obviously this is something that everyone wants to know about – the safety and security of transactions and vulnerability of the payment method to misuse and fraud. The payment system is secure and highly encrypted. One’s fingerprint or unlock pattern is needed to open the app (even if the phone is unlocked) and thereafter a one needs to enter a four digit pin to complete any payment. In addition there is also a redressal system under NPCI/RBI guidelines. My personal experience with UPI apps has been very positive and these days, I prefer to make payments via this digital payment system. The only problem I have encountered so far is that I tend to spend more than I realise; quite simply because of how user-friendly this payment system is. These days, before making any payment, I ask: do you have Google Pay?
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