🧭 What is UPI & How It Works

UPI connects your bank account to a virtual payment address (UPI ID) so you can transfer funds in real time. It’s interoperable across banks and apps, so a user on one app can pay another user on a different app seamlessly.

• UPI ID: Your virtual address (e.g., name@bank).
• UPI PIN: Your secure 4–6 digit authorization code.
• Handles: Different apps use different suffixes (e.g., @okicici, @ybl, @axisbank).
• Modes: Pay via UPI ID, mobile number, QR code, or account number/IFSC.

⚙️ Set Up UPI (Step-by-Step)

1. Install a UPI app (e.g., BHIM, PhonePe, Google Pay, Paytm).
2. Verify mobile number with SMS (use the SIM linked to your bank account).
3. Select your bank → auto-fetch accounts linked to your number.
4. Create or reset your UPI PIN with your debit card details (as prompted).
5. Choose your default account for sending/receiving.
6. Create your UPI ID (easy to remember) and you’re done.

Tip: Keep your app updated for smoother onboarding and security patches.

💸 Send & Receive Money

📏 Limits, Charges & Settlement

Limits: UPI limits vary by bank, account type, and app. Many banks apply:

• Per-transaction cap (e.g., a set amount per transfer).
• Daily cap (total amount and/or number of transactions).
• New payee cool-off limits for the first 24 hours.

Charges: Person-to-person UPI transfers are typically free. Merchant transactions or special services may have charges depending on your bank/app. Always check the official notes inside your app.

Settlement: UPI is real-time; occasional delays or “pending” states can occur due to bank or network issues. Funds usually auto-reconcile shortly.

⚡ UPI Lite: Faster Small Payments

UPI Lite stores a small on-device balance to make quick, low-value payments that are more resilient during peak times.

• Great for kiosks, transit, and micro-purchases.
• Fewer transaction failures and faster checkouts.
• Top up from your bank account inside the UPI app.

💳 RuPay Credit on UPI

Linking eligible RuPay credit cards to UPI lets you pay via QR or UPI ID and have it billed as a card transaction.

• Convenient for large purchases and rewards accrual.
• Acceptance may vary by merchant configuration.
• Card terms, limits, and fees apply as per your issuer.

🧾 UPI QR Types (P2P & Merchant)

• Static QR: Fixed QR that accepts any amount (payer enters amount).
• Dynamic QR: Auto-generated with amount and invoice details (less errors).
• Interoperable: Most UPI QRs can be paid from any UPI app.

Tip: Merchants should display QRs clearly, add a nameplate, and ensure lighting for quick scanning.

🏪 Merchant Onboarding (Small Business)

1. Choose a UPI PSP/acquirer (via bank or payment app).
2. Provide KYC: PAN, Aadhaar, business details as required.
3. Get your merchant UPI ID and QR.
4. Place QR at billing counter; train staff to confirm payer name and amount.
5. Use app dashboard/statement to reconcile daily sales.

Pro Tip For online sales, integrate UPI Intent/Collect flows in checkout to reduce drop-offs.

🛠️ Troubleshooting Common UPI Errors

New Payee Limit Hit

Most banks impose lower limits for the first 24 hours after adding a new payee. Try smaller amounts or wait for the cooling period.

QR Not Scanning

• Clean camera lens; improve lighting; avoid glare.
• Check if the QR is damaged or distorted; try manual UPI ID.

🔐 Security Checklist (Must-Follow)

• Never share UPI PIN, OTP, or card details—support will never ask.
• Beware of Collect requests; verify the requester before approving.
• Use app lock/biometrics; keep SIM and email secure.
• Install apps only from official stores; watch for look-alike apps.
• Review SMS/email alerts; report suspicious activity immediately.

❓ Frequently Asked Questions

Is UPI free for personal transfers?

Person-to-person UPI transfers are generally free. Merchant transactions or value-added services may vary by provider.

What’s the daily limit for UPI?

Depends on your bank/app and account type. See your bank’s limit page inside the UPI app for the latest figure.

Can I link multiple bank accounts?

Yes. You can add multiple accounts and select a default for sending/receiving. You can also switch accounts during payment.

What is a UPI Collect request?

A request where someone asks you to approve a debit from your account. Verify the requester name/amount carefully before approving.

How do refunds work on UPI?

Refunds from merchants typically credit back to your original paying account/UPI handle. Processing time depends on the merchant and bank.