A robust payment system is essential for business expansion, particularly for MSMEs in India. Options like mobile wallet apps such as PhonePe and the Bharat Bill Payment System (BBPS) offer convenience and security, catering to various needs.

Choosing the right payment system is crucial for Indian SMEs to ensure customer satisfaction, revenue growth, and competitiveness in the digital economy. UPI, developed by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI), stands out. Built on the Immediate Payment Service (IMPS) infrastructure, UPI facilitates instant money transfers between any two bank accounts.

How to Create UPI ID, Using a Virtual Payment Address (VPA), users can execute transactions seamlessly. Only mobile phones with the registered SIM card or mobile number linked to the bank can initiate payments. Essentially, UPI turns smartphones into virtual debit cards, eliminating the need for bank details or personal information like IFSC codes.

Transactions through UPI require only a UPI ID and UPI PIN, ensuring simplicity and security. With bank integration and support from third-party payment service providers and digital wallets, UPI facilitates round-the-clock money transfers via mobile devices.

• The Unified Payments Interface (UPI) stands out as one of India’s most utilized payment platforms, particularly among micro, small, and medium enterprises (MSMEs).
• For small businesses, the UPI app proves highly advantageous due to its user-friendly interface and accessibility via mobile devices. Through this app, businesses can efficiently manage payments from various sources by linking their UPI ID to multiple bank accounts.

What is UPI ID? Your Virtual Payment Address Explained

The UPI ID, also referred to as Virtual Payment Address (VPA), serves as a crucial element in facilitating payments between users and merchants. Each UPI ID is unique to the individual, offering a secure means of transferring funds without disclosing sensitive bank account details.

Users can easily create their personalized UPI ID on their preferred UPI-enabled application, such as Google Pay, Paytm, PhonePe, Amazon Pay, or CRED. To do so, individuals need to download the UPI app on their mobile devices and complete the registration process.

Having a linked bank account is a prerequisite for utilizing UPI platforms for both sending and receiving payments. With UPI IDs, users can bypass the need to divulge essential banking information like account number, IFSC code, or branch address, streamlining the transaction process and enhancing security.

Example UPI IDs:

• kalyan@okhdfcbank (where “kalyan” represents the customer’s name, and “okhdfcbank” signifies the bank ID)
• 9XXXXXXX00@ybl (where “9XXXXXXX00” denotes the registered mobile number, and “ybl” indicates the bank ID)

How to Utilize Your UPI ID

Your UPI ID or Virtual Payment Address (VPA) serves as the primary point of contact for receiving payments from customers or family members. It’s the information you provide instead of sharing your bank account number.

Here’s how it works: Similar to sending a text message where you input a recipient’s name or number, the UPI ID operates similarly.

When you intend to transfer funds to someone, you only require their UPI ID; their bank account number isn’t necessary. Simply input their UPI ID into your UPI-enabled app and initiate the payment.

Unlocking the Potential Features and Advantages of UPI Transactions

1. Simplified Process: UPI transactions have gained immense popularity in India due to their simplicity, speed, and accessibility. Compared to traditional banking methods like deposits or checks, UPI payments offer a hassle-free experience.
2. Generous Transaction Limits: With UPI, the daily transaction limit is typically more than adequate for most users, including SMEs. This makes UPI the preferred choice for cash collection or transfers, promoting a cashless economy and eliminating the need for long bank queues.
3. Cost-Free Transactions: UPI transactions come with no fees or charges. Originally, a nominal fee of 50 paise per transaction was proposed by NPCI, but the government later waived it to encourage wider adoption of digital transactions.
4. Enhanced Security: Each UPI transaction requires a unique user ID linked to a specific bank account, ensuring that funds reach the intended recipient securely. Transactions occur directly between bank accounts, minimizing the risk associated with third-party intermediaries.
5. Instantaneous Transfers: UPI facilitates real-time transfers, enabling recipients to receive payments instantly upon initiation by the sender. This swift process streamlines everyday activities such as grocery shopping, commuting, or settling bills.
6. QR Code Integration: Businesses can easily accept payments via UPI by displaying a QR code that customers can scan using any UPI-linked mobile app. This convenient payment acceptance channel enhances customer satisfaction and operational efficiency.
7. Multi-Bank Account Access: Contrary to misconceptions, UPI apps like BHIM SBI Pay support both SBI and non-SBI bank accounts, offering users flexibility and convenience in managing multiple accounts through a single app.
8. Credit Card Integration: UPI’s integration with credit cards is anticipated to boost adoption among fintech platforms, enhancing transactional capabilities and offering customers more payment options.
9. No Minimum Transaction Requirement: UPI transactions have no minimum transaction threshold, allowing users to make purchases for as little as Re 1. This flexibility appeals to frequent traders and promotes digital transactions.
10. Offline Transaction Capability: While internet connectivity is typically required for UPI transactions, certain UPI apps offer offline transaction options via text messages, ensuring accessibility for users across all demographics.

A Step-by-Step Guide to Creating a UPI ID

Creating a UPI ID is a straightforward process with various UPI-enabled mobile applications available on Google Play Store and the App Store. Here’s how to create a UPI ID using different UPI mobile applications:

Creating a UPI ID on the BHIM App

• Step 1: Download the BHIM app from Google Play Store or App Store.
• Step 2: Open the app, select your preferred language, and click on “Proceed” (grant necessary permissions like SMS, call, and location).
• Step 3: The BHIM app will send an SMS from your smartphone to verify your mobile number.
• Step 4: After successful verification, select your bank from the list.
• Step 5: The app will automatically fetch your account number and IFSC linked to your mobile number. Choose the desired account if you have multiple linked.
• Step 6: Confirm your bank details and set up a 4 or 6-digit PIN for secure transactions.

Creating a UPI ID on Google Pay

• Step 1: Download and launch the Google Pay app.
• Step 2: Click on your Profile Picture at the top right corner.
• Step 3: Navigate to Bank account.
• Step 4: Choose the bank account added to Google Pay.
• Step 5: Click on Edit next to ‘UPI ID’.
• Step 6: Select Plus+ to create your UPI ID.

Creating a UPI ID on PhonePe

• Step 1: Download and open the PhonePe app, then complete the registration process.
• Step 2: Under ‘My Money’, go to Bank Accounts under Payments, and select your bank account.
• Step 3: Choose an extension from the dropdown menu and click on the “+” icon next to it.
• Step 4: Tap on “Create” to enter your selected UPI ID.
• Step 5: Click on “Activate” to confirm.

Create UPI ID through *99#

• Step 1: Dial *99# on your phone and initiate the call.
• Step 2: Select your preferred language.
• Step 3: Enter your bank name or the first four digits of your branch’s IFSC Code.
• Step 4: Choose your bank account.
• Step 5: Provide the last six digits and expiry date of your debit card.
• Step 6: Confirm your UPI PIN.

Follow these steps according to your preferred UPI mobile application or dial *99# to create your UPI ID effortlessly.

Also Read How to Create a Business Gmail Account

How to Remove an Extra UPI ID

To remove an extra UPI ID, follow these steps in your UPI app:

Remove Extra UPI ID from Google Pay

1. Open the Google Pay app.
2. Tap on your profile picture.
3. Select the bank account associated with the UPI ID.
4. Click on ‘Manage UPI IDs’.
5. Identify the UPI ID you want to delete and click on the delete icon next to it.

Remove Extra UPI ID from PhonePe

1. Open the PhonePe app.
2. Tap on your profile picture.
3. Choose the bank account.
4. Under ‘UPI IDs’, locate the UPI ID you wish to remove.
5. Click on the delete icon next to the UPI ID to delete it.

Remove Extra UPI ID from Paytm

1. Open the Paytm app.
2. Tap on your profile icon at the top left corner.
3. Scroll down and select ‘UPI & Payment Settings’.
4. Choose ‘UPI & Linked Bank Accounts’.
5. Select the bank account and click ‘Remove’.
6. Confirm the action by clicking on the ‘Confirm’ button.

Follow these steps to efficiently remove any additional UPI IDs associated with your accounts.

Leveraging Mobile Banking Apps for UPI ID Management

Mobile banking applications offer seamless access to UPI services, enabling users to initiate fund transfers and make payments effortlessly. This convenience is especially beneficial for SMEs, empowering them with quick and secure money transfer capabilities without the need to disclose sensitive bank account details, thus mitigating the risk of data theft.

Here’s how you can find and change your UPI ID using mobile banking apps:

1. Validate Your Registered Mobile Number:
   • Ensure that the mobile number registered with your bank is confirmed.
2. Create a 4-Digit PIN:
   • After validation, the app will prompt you to create a 4-digit PIN for security purposes.
3. Access Your UPI ID:
   • Navigate to the “My Profile” section within the UPI app, usually located in the top left corner.
   • Your UPI ID, typically in the format of Yourname@bankname (email address), can be found here.
4. Change Your UPI ID:
   • Utilize the app’s functionality to modify your UPI ID according to your preference.

By following these steps, users can efficiently manage their UPI IDs within mobile banking applications, ensuring ease of use and security in digital transactions.

How to Transfer Money Using UPI ID

Traditional fund transfers require cumbersome details like the beneficiary’s bank account number, branch address, bank name, and IFSC. Simplify this process by utilizing a UPI ID for seamless fund transfers.

Here’s how to send and receive money using UPI ID with just a mobile phone:

1. Dial *99# and select option ‘1’ to initiate a fund transfer.
2. Choose the recipient by providing their mobile number, UPI ID, selecting from stored beneficiaries, or entering their account number and IFSC code.
3. Press “Send” after entering the recipient’s UPI ID and input the desired amount for transfer.
4. Optionally, add a comment, or skip by entering ‘1’.
5. Confirm the transaction by entering your UPI PIN when prompted.
6. Upon successful transfer, you’ll receive a confirmation notification.

With UPI, sending money becomes hassle-free and can be done without the need for internet connectivity.

Also Read How to Create a Digital Signature in Word

How to Set UPI PIN and Transfer Money Using UPI ID

Setting UPI PIN:

1. Launch your UPI app on your smartphone and select ‘Add Bank Account’.
2. Choose your bank from the provided list and wait for the SMS verification on your registered mobile number.
3. Once your bank account and phone number are verified, your device will be successfully registered.
4. Set up your UPI PIN, which can be a 4 to 6-digit mPIN.
5. Your UPI service is now activated, and you can proceed with fund transfers and payments once your UPI PIN is generated.

Transferring Money Using UPI ID:

1. Open your preferred UPI app and input the recipient’s UPI ID, phone number, or account number. Alternatively, you can scan the recipient’s QR code.
2. Enter the amount you wish to transfer.
3. Authenticate the transaction by entering your UPI PIN.
4. (Optional): Monitor transaction status and history through your UPI app.