UPI Payments: What Is UPI & How Does It Work?


Rini Sinha   | Senior Manager - Products - Ezetap Mobile Solutions Pvt. Ltd.

Aug 24, 2021

What is UPI & How Does it Work
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We’ve been reading about how UPI has been a hero in the payments ecosystem since 2020. Complying to the COVID-19 regulations—social distancing and contactless experience—became effortless for retail businesses. UPI payments took a whopping jump with a 105% increase in the transaction value.

What is UPI Payment?

Unified Payments Interface (UPI) integrates multiple bank accounts into a mobile app, enabling instant bank transfer. It is a solution developed by NPCI (National Payments Council of India) to eliminate the need to transact with cash. It is a better and improved avatar of IMPS, where UPI ID / VPA is used to process transactions. As per NPCI’s website, the maximum UPI payment limit is Rs. 1 Lakh. However, banks are allowed to have their sub limits within the upper limit. Hence, it is advisable to always check with the bank.

Here’s How UPI Works

When making a bank transfer, the remitter (the person who sends the money) needs to enter the payee's bank details like account number, bank name, IFSC code, etc. However, UPI simplifies these details into a QR code or UPI ID/VPA—a virtual address—making bank transfers easy and quick. UPI takes convenience a notch up by enabling bank transfer via the registered phone number.

  • UPI Payment via VPA / UPI ID

    The payer needs an app like GPay, PhonePe, PayTm, Amazon Pay, and more, which supports UPI transactions. These apps have superseded banking apps since they also enable you to check account balance and transaction details (provided the transactions are processed via UPI or QR codes). The payee, i.e. you, needs to be equipped with a digital payment system that enables UPI acceptance. Assuming you and your customer both have the right applications installed, all you need to do is help them with your phone number or UPI ID. The customer can transfer money by entering the amount and authorising the payment with the UPI PIN.

  • UPI Payment via QR Code

    Now, there are two types of QR codes that you can equip as a retailer—static and dynamic.
  1. Static QR Code Payment

    As the name—static QR code—implies, is static in nature. It consolidates the merchant’s bank details like account name, account number, IFSC code, etc. into a quick response code. You can print and place it at the billing counter to enable the customer to scan, enter payment details, and pay. You cannot edit it as per each transaction.

  2. Dynamic QR Code Payment

    Dynamic QR codes need to be customised according to every transaction. You have to generate a new QR code with bank and payment details to process every transaction. The customer can scan and pay, without having to enter the bill amount.

Is UPI Secure?

As a businessman, you have to ensure security for both your customer and yourself. Since UPI converts your bank details into a UPI ID, your customers do not have to share your credentials with anyone. Also, nobody can access your information without entering the UPI PIN. Hence, it is always advisable to create a strong password and never share it with anyone.

Reasons to Opt for Ezetap’s UPI for Businesses

 

  • Payment Success Rate

    Brick-and-mortar and e-commerce businesses both have been drumming up sales by offering fully contactless experiences including contactless payments. UPI is the preferred mode of payment today. At Ezetap, we saw a surge in UPI transactions processed on our payment platform, which records one of the highest success rates at 94% for all UPI transactions.

  • Easy-to-Use Interface

    From integrating the payment solution with your existing CRM and billing systems to transforming your payment acceptance processes fully, we have devised a quick and user-friendly journey. You have a dedicated customer service and solutions team that work with you to ensure a smooth service experience. We also have a range of devices to provide your customers with a tailored payment experience.

  • Auto Reconciliation

    With our payment platform, you don’t have to worry about reconciliation. We offer three-way auto-reconciliation, which eliminates error-prone manual processes.

  • Multiple Payment Options

    When you opt for our Universal Payment Platform, you are armed with an integrated solution that facilitates all digital payment modes—debit and credit card, UPI, BQR, e-wallet, and SMS Pay. Offer flexible payment options to your customers for a comfortable checkout experience.

  • Payment Platform with Value-added Services (VAS)

    At Ezetap, we offer a range of value-added services for businesses that make managing payments effortless. From digital khata to instant emi and Merchant rewards, we include crucial services into our Universal Payment Platform to provide you with a holistic solution for business growth.

  • Best-in-Class Services

    Along with rendering a top-notch digital payment system, we are also known to have a uber-responsive team that's at your service 24x7. Our support team is accessible on call, email as well as chat to answer any questions and offer immediate solutions. Contact us to know how to accept UPI payments instantly!

 

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