With demonetisation being all the rage these past few weeks, mobile wallets have been in high demand. People are looking for ways to bypass cash and businesses are trying really hard to get customers to try their apps. This puts us, the customers with a problem of plenty. So which app do you choose to drive away your demonetisation blues?
There is a plethora of digital wallets available out there and the best thing about them, is, undoubtedly, the convenience they offer, both while setting up and when you are transferring money to someone. These digital wallets have transformed your mobile number into a destination for all your money transfers. I remember sharing a ride from the Bengaluru airport with a stranger (who later became a facebook friend) and splitting the bill over paytm. The numerous cashbacks and offers are just the icing on the cake.
However, wallets have one drawback and that is the fact they are a closed loop system. Firstly, you cannot transfer money between different wallets, like say, from a paytm to a MobiKwik. And secondly, they charge you a decent amount when you transfer your wallet balance to a bank account (around 4% of the amount transferred).
Long before wallets came into the picture, I preferred settling split-up lunch bills digitally. The idea of being cash-less was something I loved even before digital wallets (and more importantly demonetisation) came into the picture. Then, there used to be only one option and that was NEFT.
If I had to transfer money to you, I would need to ask for your bank name, bank branch / IFSC and account number. (IFSC stands for Indian Financial System Code. So you either ask for IFSC or IFS code, not IFSC code 🙂 ) And then my bank would ask me to wait for some time (usually 4 hours to a day) before allowing transfers to happen. Overall, a pretty tedious procedure and if you are a stranger, why would I want to share all these details with you in the first place.
This is where UPI, the topic of this blog, comes into the picture. As most of you have already heard UPI stands for Unified Payment Interface and is a smart new way of transferring money. Built on the IMPS (Immediate Payment Service) infrastructure, UPI simplifies the process of transferring money between accounts.
UPI provides an alias for your bank account. Like paytm made your mobile number your transfer destination, UPI identifies your bank account with a VPA (Virtual Payment Address! How many more abbreviations?) that looks like an email id. My ICICI VPA looks like this sagaran@icici. So if I need to get money from you, I’ll give you this address and you can send money here, just like an email. No need to share any bank details at all. And the money is transferred instantaneously, and directly, to your bank account.
The only problem with UPI : not too many people are using it. Heck, not too many people know about it at all! So here’s your lowdown on getting started with UPI.
Getting started with UPI
So what do you need to get started with UPI?
1) A savings bank account (with registration done for mobile banking)
Currently around 30 banks are supported. If you are bank isn’t on the list, it should be there soon ( Complete list of supported banks)
2) A mobile connected to the Internet (with the registered mobile number active on it)
Now there are a plethora of UPI apps available – some issued by banks, some by non-banking players. You can chose any UPI app irrespective of the bank in which you have the account. So you can choose the ‘Axis Pay’ app even if your bank account is in ICICI.