Full Form of UPI, Unified Payment Interface, Banking Sector

The full form of UPI is Unified Payment Interface. UPI is a system of banking developed by the National Payments Corporation of India (NPCI) for safe, secure, and easier transactions. 

Furthermore, UPI is a mobile application which brings together numerous bank accounts of all participating banks at one place in an application programming interface of mobiles. UPI facilitates both peer-to-peer and peer-to-merchant transactions round the clock. 

Notably, the major stakeholders of UPI are NPCI, bank account holders, payee and payer PSP, participating banks, and merchants. As a matter of fact, several other countries other than India use a similar mobile interface application linked to UPI.  

What is UPI?

UPI is an acronym for Unified Payment Interface. It is an open-source application programming interface designed to carry out banking transactions. 

Unified Payment Interface (UPI) is a system that incorporates a number of bank accounts of participating banks into one mobile application by merging the features of banking. It facilitates both peer-to-peer and peer-to-merchant banking transactions. 

Moreover, the UPI was developed by the National Payments Corporation of India (NPCI). It was introduced on 11 April 2016 as a pilot launch with 21 banks as its members. At present, there are more than 300 banks in the country linked to UPI. 

Who are the Participants in UPI?

The seven major participants of Unified Payment Interface (UPI) include the following:

1. Payee PSP
2. Payer PSP
3. Beneficiary Bank
4. Remitter Bank 
5. NPCI (National Payments Corporation of India)
6. Merchants, and 
7. Bank Account holders. 

Characteristics of UPI (Unified Payment Interface) 

Evidently, UPI is a mobile application facilitating banking transactions. Some other important qualities of UPI worth noting are as follows:

1. A round the clock system 

Significantly, UPI facilitates banking transactions to be made throughout the day (24*7) for the entire year (365 days).

2. UPI is a single mobile application to access different bank accounts. 
3. Single click 2-factor authentication system 

Unified Payment Interface provides a two-factor authentication system to ensure safe and secured payments. Although it is aligned with regulatory guidelines, it provides a single-click payment option. 

4. Virtual address of the customer for transactions 

Notably, UPI ensures the safety of a customer by not using their important details such as bank account no, IFSC, card no., etc. Instead, it makes use of the virtual address for both push and pull transactions. 

5. It facilitates QR code-based payments, utility bills and over the counter payments. 
6. In-app payments for merchant payment

Evidently, UPI provides a single application through which merchants can make safe in-app payments at a single place.  

Benefits of UPI

Unified Payment Interface (UPI) is a useful mobile application which allows safe and secure banking transactions. It is beneficial to all its stakeholders, including the participating banks, its customers, and merchants. 

Some of its key merits include: 

1. An all round payment system with a single click option to make transactions. 
2. Two-factor authentication for banks and factor authentication for customers. 
3. Customers can make use of Virtual ID without sharing their important details such as bank account number, etc. 
4. It is highly suitable for both e-com and m-com transactions. 
5. Safe, secured and innovative method of making both push and pull banking transactions. 

Summing up, the full form of UPI is Unified Payment Interface. It is an application interface software designed to perform banking transactions. The UPI unifies several bank accounts from various banks at one place, making transactions easy and secure. 

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