UPI stands for the "Unified Payments Interface". It provides access to several banking services, such as account queries, money remittances and merchant payments through a single interface (such as a mobile phone). Payments happen using the Immediate Payment Services (IMPS) interface for 24 by 7 instant payments. It works with bank accounts of UPI enabled banks.
How do I use UPI?
If you have a smartphone with internet access, my recommendation would be to download an appropriate UPI app and follow the instructions there. NPCI's BHIM app also works for this. If you don't have access to a smartphone or data, you can follow the steps below to still use UPI for making and receiving payments.
Registering for UPI using *99#
You can register bank accounts for which you have the mobile number linked. At one time, you can link one account, though you can change the account using the profile option, as you can discover.
Select your preferred language. For example, for English, dial 1 and send.
Type in the first three letters of your bank name or short code.
If you have multiple accounts, choose the one you wish to use as the default UPI interface.
You should receive the message "Congrats. You can now receive money to your mobile number".
You can give payers just your phone number and the money will go to your bank account using IMPS. If they are using an old style UPI application, then you can ask them to use the virtual payment address "mobilenumber@upi". For example, if the mobile number is 1234567890, the VPA is "1234567890@upi". You can also create a new payment address using a UPI app or using the "Manage Profile" menu option in *99#.
Setting MPIN for allowing sending money
Note: If you have already set an MPIN using a UPI app for this account, you can skip this step. In addition, if you are comfortable using a UPI app on your smartphone, you don't need this.
Assuming that you have a valid debit card linked to your account:
Choose the "UPI PIN" option (number 7 as of writing this).
Enter the last six digits of the debit card number followed by the expiry. For example, if the last six digits of your card number are 123456 and it expires in June 2017, you should enter "123456 0617".
Follow the instructions and set a new MPIN.
Dial *99# then 1 for "Send money" and choose from the multitude of options, including:
Mobile number (assuming the recipient has completed the above registration step)
Payment address: any UPI address, such as sbiusername@sbi.
Saved beneficiary: you can add beneficiary by using the "Manage Profile" option. An option is also given to add the beneficiary if you send money to him/her once.
IFSC code and account number.
MMID and mobile number.
From an app:
If the recipient gives you a UPI VPA, just enter that and send money.
If they have UPI registered as per "Registering for UPI using *99#" then send money using VPA <mobilenumber>@upi.
If they have don't have UPI registered but have MMID, send money using 91<10digit mobile number>@<MMID>.mmid.ncpi using any UPI app (if that is what you want).
Or, just use the IFSC + account number pair.
How much does this cost and what are the limits?
A: Currently, IMPS costs Rs. 5 plus service tax per transaction. However, vide this RBI circular, charges for all transactions for amounts upto Rs. 1000 have been waived till March 31st, 2017. The limits on the transactions through each mode are given here.
Every usage of *99# also incurs a charge, but is free as of writing this. TRAI has capped the rate at Rs. 1.50 per session.
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