dmpq-What is Unified Payment Interface (UPI) ? Mention the importance and challenges associated with UPI.

Unified Payment Interface (UPI) is recently in news. UPI is believed to revolutionize the way Indians do banking. In this post we will see what UPI is and how safe is using UPI.

Unified Payment Interface (UPI) is a newly introduced platform to transfer money between any two bank accounts in India, by avoiding the existing complexities.  UPI is an indigenous payment system which works with the help of a smartphone.

UPI is standardized across banks, which means you can initiate a bank account transfer from anywhere with a few clicks. This means that UPI will help you to pay directly from your bank account to different merchants without the hassle of typing your netbanking password, credit card details or IFSC code. Apart from cards, net banking and wallets, you can now pay through UPI too. Unified Payment Interface (UPI) allows paying someone as well as ‘collect’ cash from someone.

significance of Unified Payment Interface

  • Facilitate Person to Business (P2B) transactions via collect payment option. This would boost business and Indian Economy overall.
  • UPI will bring down cash circulated in the economy (currently cash in circulation is 12% of GDP).
  • UPI will bring down annual cost of currency transactions (currently around Rs. 20000 crores).


  • Refunds are currently not part of UPI and the authority for all arbitration lies with NPCI.
  • The introduction of UPI is most likely to badly affect the Wallet Companies.
  • The per transaction limit of Rs.1 lakh may not go well with all customers/business.


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