Reasons why the UPI system is here to stay
UPI has gained ground after the COVID-19 pandemic. Money Control, a fintech company, stated that during the pandemic in 2020, the National Payment Corporation of India processed 200 crore UPI transactions worth 3.9 lakh crore.
From this data, you can guess how much growth was seen in the UPI system after the pandemic. Another aspect of this increment is that the NPCI raised the UPI limit per day for transactions. There are some other reasons why the UPI system is here to stay that we discuss in this blog post.
UPI system makes online shopping easy and convenient.
What is the UPI system?
“UPI is an abbreviation for “Unified Payment Interface.” The UPI system is a platform that connects all bank accounts into a single platform via the UPI application, which includes Phonepe, Google Pay, and many more.
What exactly is the UPI limit per day for transactions?
- The updated policy of the NPCI states that the maximum UPI transaction limit per day is Rs 2 lakhs.
- The maximum UPI transaction frequency per day is 10.
- But the UPI transaction limit varies for several banks. You can check here for the UPI limit per day for different banks.
Why does the UPI system exist over the other payment platforms?
Here are the reasons for the UPI System’s prevalence.
Instant Money Transfer
Money transfers from NEFT and RTGS take 30 minutes to 24 hours after you register yourself on their platforms.
Whereas UPI works on an Immediate Payment System, so you can transfer money instantly just after registering yourself in it. But you should remember your bank account’s UPI transaction limit, otherwise, payment failure may be possible.
Highly Secure Platform
When you use debit, credit cards, and net banking for online payments, you need bank account details, CVV, and other login credentials. So, there is a possibility of stealing money if fraudsters overlook your bank credentials while you punch and insert them into the POS terminal.
But with the UPI system, you need only a registered mobile number or UPI ID. It means that you do not have to mention any kind of bank account details.
Privacy of Bank Account
In the UPI gateway, you do not require to mention your bank data while paying money. That is why your bank account’s privacy remains intact.
The request money feature of the UPI sends a message to the clients directly. This message is sent via the bank for the approval of payment. If clients approve, the payment will be remitted instantly. This feature helps every merchant remind clients to pay the money.
Useful for Small Payments
It is not possible to pay small amounts, like Rs 10, to shopkeepers and other merchants using NEFT and RTGS. Whereas in the UPI system, you can pay the smallest amount of Rs 1 to the merchants.
Integration of Many Accounts in One App
The maximum UPI limit per day for transactions is Rs 2 lakh per day. So what do you do when you need to transfer more than two lakhs a day? In this case, you can integrate your other bank account with the same UPI application, and then you can transact funds of more than 2 lakhs.
Rewards and Cashbacks
There are many UPI-based mobile apps like Google Pay, Phone Pay, and many others that are available in the market. You can get a variety of rewards and cashback for making transactions using multiple UPI apps.
Cheap Fund Transfer
The UPI system charges a per-transaction fee of Rs 0.5, which is significantly less than the transaction fees charged by NEFT and RTGS.
The UPI system is a fast and reliable platform for the transaction of money. It keeps your bank details safe and prevents fraudsters from stealing money from your bank accounts. Using the UPI platform, you can transact a large amount of money in a second by touching the screen of your smartphone. That is why the UPI system has become more prevalent than its counterparts.