what is UPI? How does it work?

 UPI  - Unified Payment System

Developed by-  NPCI (National payment corporation of India)

Regulated by - RBI (Reserve Bank of India)

UPI Stands Unified Payments Interface. it is a real time payment system that allows user to link one or more than one bank account in the single smartphone app It makes funds transfer and allow transaction without having to provide Account number and IFSC code. In UPI Funds are credited instantly on a real time. User can transfer money to the another user with the use of it. It is developed by the National payment corporation of India (NPCI), and it is regulated by the Reserve bank of India. 

To transfer funds via UPI number of things are required :- 

1.  A Smartphone
2.  Internet Connection
3.  An active bank account, with electronic card.
4. The mobile number must be active and linked the particular bank account. 

How does it work? 

For using UPI user need to have a bank account with a UPI enabled bank and create a UPI ID, which is a unique virtual payment address. User  can create this ID through the bank's mobile app or BHIM UPI app. After creating  the UPI ID,  link the bank account to it. User can link multiple bank accounts to the same UPI ID. After linking the bank account  initiated transaction, to make a payment open the UPI enabled app, which can be bank own app or third party app, Enter the recipient's UPI ID or mobile number, and the amount you want to transfer click the send button after that you will get   verification detail, verify the transaction detail and enter the UPI PIN and send button. After the payment user/sender  will receive the  confirmation massage recipient user will also get a notification of the payment. 

There are number of participants in UPI Transaction  namely :- 

1.NPCI (National Payment Corporation   of India) 

2.Merchant 

3. Remitter bank 

4. Beneficiary bank

5. Bank Account holder

6. Payee PSP (Payment service provider) 

7. Payer PSP