Abstract: -

This paper studies Unified Payment Interface (UPI), a new age payment system
introduced in India by National Payment Corporation of India (NPCI).

The paper traces the evolution of payments systems in India and examines in
detail the technology behind Unified Payment Interface focusing on its
architecture and security systems through practical and theoretical literature
review.

UPI is a significant advancement as compared to extant payment system in

terms of cost, ease of use for consumers, settlement times and security and has
witnessed good user adoption.

UPI has made digital transaction for individuals as easy as sending text
messages.

Unified Payment Interface is expected to change the way payments are being
made to restaurants, retail shops, cabs and even e-commerce companies. The
new payment method is further expected to revolutionize the mobile banking
which has grown exponentially among retail and corporate customers recently

The study is Descriptive and based on secondary data collected by through the
UPI apps & customer reviews.

The study is conducted for analyze the customer satisfaction OR dissatisfaction.

Keywords: - Mobile payments, Unified Payment Interface, Digital Payments, Cashless, simple,
secure

Introduction: - After Demonetization there was huge requirement for currency notes but
government was unable to provide required quantity of currency notes and also Indian
government wanted to promote cashless transactions. Than the NPCI starts the UPI system on
25 August 2016.

UPI is built over Immediate Payment Service (IMPS) for transferring funds using Virtual Payment
Address (a unique ID provided by the bank), Account Number with IFS Code, Mobile Number
with MMID (Mobile Money Identifier), Aadhaar Number, or a one-time use Virtual ID.

UPI service is available 24X7, not like RTGS or NEFT which don’t work on holidays or during non-
banking hours.

UPI is expected to change the way payments are being made to restaurants, retail shops, cabs
and even e-commerce companies. The new payment method is further expected to
revolutionize the mobile banking which has grown exponentially among retail and corporate
customers recently.

Objectives: -

 To study about cash less transaction and payment system of UPI in India.
 To differentiate between apps that providing UPI facilities in India.
 To evaluate the payment system by UPI through various means of transaction.
 To Focusing on its architecture and security system through practical and theoretical
literature review

Unique Features of UPI

Today People widely use the UPI apps to send and receive money. Let us understand those
unique features which have made it very popular.
Immediate Transfer
The Unified payment system transfers fund immediately from one account to another. This
transfer facility is available round the clock and on all days. There is no outage, strike or holiday.
Single App for Any Bank Account
It is the only payment system which gives you the power to access any bank account form the
same app. It is not necessary to use SBI app to access the SBI bank account. A UPI app from the
ICICI Bank can access your SBI bank account. Google Pay (Tez) is not related to any bank still, it
can access your bank account. Similarly, BHIM app can link any of your bank accounts.

UPI ID or Virtual Payment Address

It gives you the facility to get money to a UPI ID or virtual payment address. You can make a
VPA of your UPI app. When someone transfers money to this VPA, the money directly goes to
the linked bank account. Because of the UPI ID, you are not required to share your bank
account details. This system of UPI ID works among all the UPI apps.

Multiple Ways to Pay

Besides UPI ID, you can also send money using bank account number and IFSC. It is the same
old method. The UPI apps also give you the options of mobile number and QR code to send the
money. thus, there are 3 ways to send the money.

 Virtual Address
 A/c no. & IFSC code
 Mobile no. and MMID
 QR code

Payment to QR Code
UPI also supports the payment to QR code. In fact, a QR code is like the UPI ID But, it is readable
only to the machine. When you scan a QR code the app identifies the recipient. Further, you
can pay money to that recipient. The shopkeepers and merchant use this QR code to get
payments.

Split Bill
The UPI app gives you the facility to split the bill among many people. It is useful when many
people want to pay to a single person. The system equally splits bill among the named payers.

One Time Mandate

The UPI App also gives you the facility of the one-time mandate. In this facility, you can
schedule a payment for the future. In this system, you can set a maximum limit for the transfer.
The biller can itself draw the amount without your further permission. It is very useful in case of
regular payments such as bills and rent.
Easy to Use
You know that using a banking app is easier than internet banking. The UPI has made it further
simpler. The fund transfer through it is simple due to the following reasons.

1. You can open app by entering easy to remember PIN.

2. You are not required to add a beneficiary previously. You can immediately transfer
money to anyone. There is no compulsory wait period.
3. The final authentication is also PIN-based. You have to enter the UPI PIN to approve the
payment. There is no alphanumeric transaction password.

It is Free
The NPCI does not charge anything for the Unified payment system. It is freely available to the
participating banks. In turn, banks are also not charging anything for their apps and facilitation.
Everyone is trying to keep this system free so that people can widely use this new mode of
digital transaction. However, in future banks may charge some amount for using their app.
 1. You must have a saving or current bank account.
2. The bank should have a registered mobile number.
3. You should have the debit card.
4. The mobile number should be active on your current handset.
5. There should be some balance to send SMS.
6. To use UPI mobile app, you must have a smartphone.
7. The smartphone should have Android or iOS operating system. 90% smartphones use
these operating systems.
8. You should have data pack to avail the its services.

Best UPI Apps

1.Paytm
2.Phonepe
3.Google Pay

1.Paytm
Paytm, the most popular digital wallet in India, has now integrated with the BHIM UPI platform.
Users will be able to create their own Paytm BHIM UPI ID through the app and link their savings
bank account to send and receive money. Most banks and BHIM UPI apps accept Paytm BHIM
UPI ID for easy, fast and instant money transfer on 24/7 basis and on all 365 days in a year.
There is no need to provide banks details such as account number or IFSC code to send or
collect money through this app. Also, there is no waiting time for adding a payee/beneficiary.

All Paytm merchants will now be able to link their bank accounts and receive payments.
Customers can send as much as Rs.1 lakh through the app and there is no upper limit on how
much a user can0 receive. The Paytm BHIM app can be downloaded from Google Play Store on
all Android phones. The facility is likely to be rolled out to iOS phones in the near future. UPI is
likely to make transactions simple and hassle-free for both consumers and merchants.
Customers need not recharge their Paytm wallet henceforth because money will be directly
debited from the savings bank account that is linked through UPI on the app in a safe and
secure manner. Also, there are no transaction fees and money can be sent and received free of
charge.

How to use BHIM UPI on Paytm

The first step is to download or upgrade to the most recent version of the Paytm app. The
following is the step-by-step process to activate BHIM UPI on Paytm and add a bank account:
Step 1: Login to the Paytm app
Step 2: Go to the home screen and click on BHIM UPI
Step 3: Choose a bank account and wait for the bank to verify the account and mobile number
details with the Paytm account
Step 4: Post bank account verification, proceed to set up UPI ID and pin

2.Phone pe

Phone Pe is a financial technology company headquartered in Bangalore, India. It was

founded in December 2015. It provides an online payment system based on Unified
Payments Interface (UPI), which is a new process in electronic funds transfer launched by
National Payments Corporation of India (NPCI).

 Step 1

Open menu by tapping on the   icon at top right corner of the screen

 Step 2

Go to Bank Account section, and tap on the " Add New Bank " button.

 Step 3

Select the bank which you want to link with Phone Pe from the list of available banks.

 Step 4

Phone Pe will fetch your account details in an instant and will link it to your account.
proceed to set up UPI PIN by tapping on the set UPI PIN button.
 Step 5

Enter the " last six digits " of your Debit/ATM card number and " Expiry Date " (Incase your
card does not have an expiry date, then try entering 00/49)

 Step 6

Use the OTP which you received from your bank, to set your UPI PIN.

 Step 7

You have added your bank account successfully, now you trans

3.Google Pay

Google Pay (formerly Google Tez) is an online payment app that provides users with an
option to send or receive money over Unified Payments Interface (UPI). Unlike
traditional payment transfer methods like NEFT and RTGS, UPI makes it easier to send or
receive money directly from or to a bank account in real time, just like a text message.
Let’s take a look at how to set up Google Pay, add a bank account and send or receive
money over UPI.

How to setup a Google pay Account

Step 1: Download and install the Google Pay app from for Android (Google Play Store) or
iOS (App Store). Open the app and enter your mobile number registered with the bank
account you would like to add.

Step 2: Google will attempt to verify your mobile number by sending an SMS. Enter your
one-time password (OTP) manually or let the app access SMS.

Step 3: Set up a Google PIN for protection. You can choose either Google PIN or your
phone’s screen lock. If you choose Google PIN, make sure you are online when
unlocking the app.

How to add Bank Account

 Step 1: Open Google Pay app. Then tap your photo in the top-left corner. It will expand
with different options to choose from. Now tap “Bank account” and then “Add bank
account.”

Step 2: Google Pay will show a list of UPI-enabled banks to choose from. Select your
bank from the list.

Step 3: In case you have an existing UPI PIN, enter the same. In case you don’t
remember your UPI PIN, tap “Forgot PIN” and follow the on-screen instructions.

How to send and receive Money

Step 1: Select a person you want to send money to by their UPI ID, QR code or mobile
number. You can also use Tap for Cash Mode.

Step 2: Enter the amount and make the payment once you authenticate using your UPI
PIN.

Step 3: To request a payment, users need to enter the amount, add a note (optional)
and hit ‘Request.’

Why is it better?
 UPI eliminates the need to share your name, your bank account number, IFSC code, or bank
branch.

 UPI also eliminates the use of physical tools like debit cards.

 It also eliminates the need to use multi-step processes like net-banking, which are prone to
phishing due to insecure frameworks.

 It is a very simple application and can be used by anyone.

 The authentication is instant and secure and can be initiated anywhere.

 It opens up the pathway for a completely cashless digital society.

 The UPI (as it stands now) is the foundation for future innovations to make all transactions
more fluid, natural and secure.

What are the other benefits?

 UPI can also be used to send a request for money, like an invoice.

 For example, Ram can become a merchant, and take payment for any goods or services he is
providing from clients account to his account.

 All companies like Uber, Ola, Big Basket, Zomato, Book My Show, etc. can register their virtual
identifiers on the UPI system and receive funds from a customer’s bank account through the
UPI.

 Customers can also use UPI to make online payments of utility bills and school fees.

Security System of UPI

1. UPI takes advantage of that and links itself with your mobile number for
identification.

2. When you sign up for a UPI app, your phone sends a push SMS for verification
purposes. This ensures that nobody can copy the OTP from another device.

3. Using push SMSs binds your device to your mobile number and needs to be
redone every time you change your device.

4. Your Paytm ID + Password alone are not enough to access your Paytm Wallet.

5. Even if someone takes your Paytm ID & Password, it is not possible to login as
OTP is delivered to your registered mobile number when logging from a new
device.

6. only way to access your account is to use the combination of your Paytm
ID/Password + Your own device or New Device with OTP to your registered
mobile number.

7. App Lock Password: You can now enable your phone’s default screen
lock/Pin/Password/Pattern/Fingerprint as your 2nd level of security to access
Paytm.
 8. You will be asked to reconfirm you Pin/Password/Pattern/Fingerprint before you
can make a payment using Paytm Wallet. This deters any unauthorized use of
your Wallet Account. Google pay is 100% safe & secure than any other
money transfer application. And it’s the plus points are

9. It doesn't need any KYC in Google Pay

10. It doesn’t work as a wallet, transfers are made directly from your bank.

11. we all know that how trustable Google is when it comes to security.

Review of Literature
Review of literature- Issues in transaction of money online There are various issues in
transaction of money online such as privacy issues in which people refrain from using digital
payments apps and there is a sense of risk for them while using these apps. Rather than risk is
riskier for non-users is the money they are about to transfer through this apps because there is
fear of losing money or they getting trapped. Therefore, to keep in other words we can say
there are security issues as well. (Radhika Basavaraj Kakadu)

Complexity of using UPI- The urban India following the recent trends and making its way
towards digitalization often adapts the new and easier ways for everything but considering the
rural areas wherein the digital illiteracy is whooping 90% wherein we can understand the usage
of UPI and because they haven’t used these kinds of modes of payment online, they feel it
more complex to use. (Radhika Basavaraj Kakadu)
Technological barriers There are technological barriers regarding UPI which is an end to
end encryption method for transactions of money meanwhile it can also cause technological
barriers like errors in using the different payments app or slow internet connections which can
hamper it. (Chatterjee)

Research Methodology
 The data collected uses the approach of exploratory research to discuss the study
relevant to the title. The information has been drawn from E-journals. Articles are
collected from relevant websites and using secondary data for analysis reviews from
internet, library, and through on UPI app.
 UPI has been launched recently. Therefor e, the data has been collected from
government and other bodies and compared different mode of payments and their
number of transactions are collected. Information has been drawn from e-journals,
articles from renowned analyst and newspapers. Thus, the study is conceptual and
descriptive type.
 Unified Payments Interface (UPI) is a system that empowers multiple bank accounts into
a single mobile application (of any participating bank), merging several banking features,
merchant payments & seamless fund routing into one hood. It also accommodates the
“Peer to Peer” collection request which can be scheduled and paid as per requirement
and convenience. It is a financial architecture and a set of standard Application
Programming Interface (API’s) by RBI to facilitate the next generation online immediate
payments leveraging trends such as increasing smartphone adoption and app
downloads, Indian language interfaces, and universal access to Internet and data
(National Payments Corporation of India, 2016).

DATA INTERPRETATION
1) So, What Is UPI?
The Unified Payment Interface (UPI) can be thought of like an email ID for
your money. It will be an unique identifier that your bank uses to transfer
money and make payments using the IMPS (Immediate Payments Service).
IMPS is faster than NEFT and lets you transfer money immediately and unlike
NEFT, it works 24×7. This means that the online payments will become much
easier without requiring a digital wallet or credit or debit card.
 2) Who is behind UPI?
Unified Payment Interface is an initiative by National Payments Corporation
of India’s (NPCI), set up with the support of the Reserve Bank of India and
Indian Banks Association (IBA). The NCPI operates the Rupay payments
infrastructure that – like Visa and MasterCard – allows different banks to
interconnect and transfer funds.
IMPS (Immediate Payments Service) is also an initiative of NCPI. UPI is the
advanced version of IMPS.
 3) How Does UPI Work?
Currently, if you want to make a bank payment online, you have to enter
their account number, account type, Bank name and IFSC code. Even if you
have all these details, typing it all in, particularly on a phone, is a painful
process. Most banks take up to 12 hours to add a new payee and only then
you can make the transfer.
The idea behind the UPI is to do away with all of this. The interface will allow
account holders across banks to send and receive money from their
smartphones using just their Aadhaar unique identity number, mobile phone
number or virtual payments address without entering bank account details.
According to NPCI, so far only 29 banks have agreed to start this service. If
your bank is UPI-enabled, you can ask it to connect you to the system. To
initiate a transaction, you can use two types of address—global or local.
Global address includes your mobile, Aadhaar and bank account numbers. A
local address can be a virtual address. Let’s say your bank gives you a virtual
ID similar to your email ID (for instance, name@companyname). This virtual
address will allow you to send and receive money from multiple banks and
prepaid payment issuers.
So, you will no longer need to use a particular app to send and receive
money. For example, if you use a taxi service, at the end of the journey you
just have to give your virtual address and the driver will request money from
it. You will get a message on your mobile phone asking for authentication.
Once you authenticate the transaction by entering your password, it will be
complete. This process doesn’t require either the driver or you to share bank
details. Since UPI runs on IMPS, the service will be available real time and
24X7
 4) What I can do with UPI?
UPI will simplify your online payments. Now, we have to use NEFT, IMPS or a
digital wallet such as phone pe or Paytm to make a quick payment to the
service providers. With the UPI, you simply need to enter your details, and
get a billing request on your phone – which you can accept or reject right
away.
Taxi aggregators like Uber and Ola, food ordering services like Zomato and
Food Panda, online grocery shops like Big Basket will be able to take
advantage of the UPI system. Going forward, such companies should be able
to register its identifier on the UPI system and receive funds from a
customer’s bank account through the UPI. Most of the similar tech
companies are now banking on mobile wallets.
Apart from this, you can send money to your family and friends instantly.

Conclusion
 From above study, it is concluded that UPI will definitely change the
way we are transacting now and transforming into digital payments
where each person’s smart phone will be primary device for all
payments
 UPI is in initial stage, When UPI is fully operational means when all the
banks join the UPI then it would be wide beneficial for banking sector
and customers in terms of sending and receiving money
 We know that in recent time, there is enormous growth in smart phone
users and penetration of internet in rural services. This leads big
potential for adoption of UPI by Indian customers
 UPI creates convenience of transacting without knowing Bank details
means knowing phone number or virtual address with high security and
simple process. From all above points we can conclude that UPI will
gradually end the cash payments and reducing circulation of currency
notes. This will lead to a transparent system and a cash less economy

Suggestions
 UPI system doesn’t have any transaction cancellation policy
it required to improve in the system.

Bibliography
https://www.bankbazaar.com/ifsc/upi-payment-app.html

https://www.instamojo.com/blog/5-best-upi-apps-instant-payments/

https://indianexpress.com/article/explained/unified-payments-interface-system-rbi-raghuram-rajan-
indian-banks-economy-3013806/

https://upipayments.co.in/paytm-upi-address/

https://upipayments.co.in/category/upi-apps/sbi-pay/
Previous Research Papers
 Rahul Gochhwal
Indian Institute of Management, Calcutta, India
 1MBA student, KLS Gogte Institute of Technology, Belagavi 2Assistant
Professor, M.B.A.(HR), KLS Gogte Institute of Technology, Belagavi (An
autonomous Institution under Visvesvaraya technological University,
Belagavi)
Books
Research Methodology
(C.R. KOTHARI)