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How does UPI work?

To use UPI, you must have a bank account with a member bank, i.e., your bank should allow you to use the UPI facility.

ET Online|
Last Updated: May 13, 2020, 12.12 PM IST
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According to the NPCI website, at present, the upper limit per UPI transaction is Rs 1 lakh per account per day.
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UPI stands for Unified Payment Interface (UPI). It allows transfer of money from one bank account to another instantly via one's mobile phone. Payments can be made via app on mobile device only. The money transfer via UPI works on 24x7 basis.

What you need to use UPI
To use UPI, you must have a bank account with a member bank, i.e., your bank should allow you to use the UPI facility. Some of the member banks include State Bank of India, HDFC Bank and ICICI Bank. You can check the list of member banks here.

Once you have checked whether you bank supports UPI payments, you need to download the UPI supporting app on your smart phone. Some of the commonly used apps offering payment via UPI method are BHIM, which is developed by NPCI, and there are some private players as well such as Paytm, PhonePe, Google Pay, Amazon Pay etc.

Remember, your mobile number must be registered with your bank account for purpose of verification. You can check the list of UPI apps by clicking here.

How to set up UPI
Once you have downloaded your chosen UPI app, then you will be required to choose the bank from the given options. To verify that it is your bank account, your bank will send you a one-time password (OTP). Once the OTP is verified, your virtual payment address (VPA) will be created.

Here is how you can set up a UPI account using the BHIM app:
Step 1: Download and install BHIM app from Google Play store or Apple App Store.
Step 2: Select your preferred language.
Step 3: Select the SIM which has your mobile number registered with your bank account.
Step 4: Set-up a four-digit login password. You need to enter this four-digit password to access the app.
Step 5: Select and link your bank account. Set your UPI PIN by providing last six digits and expiry date of your debit card.

Your account is now registered and you can send or request for money to be transferred to your account. Remember, you cannot link your mobile wallet to UPI, only a bank account can be linked to UPI. You can link more than one bank account to UPI.

How to transfer money via UPI
There are three ways to transfer money via UPI - by entering the virtual payment address (VPA) of the receiver, account number and IFSC code or QR code.

Maximum limit on transfer of money
According to the NPCI website, at present, the upper limit per UPI transaction is Rs 1 lakh per account per day. Within this upper limit different banks may have their own sub limits hence one should check with the bank.

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