HOW A UPI INTERFACE WORKS?

In this story I’m going to elaborate how a UPI i.e. Unified Payments Interface works. So let’s jump straight into the point..

So what’s basically UPI ?

Unified Payments Interface (UPI) is a system that powers multiple bank accounts into a single mobile application (of any participating bank), merging several banking features, seamless fund routing into one hood.

How it works :-

Similar to as shown in the picture there are many apps which provides the UPI payment interface. We can say that they work as an intermediate body between user and bank. Google pay, Phone pay are some the popular ones. To use the UPI a user has to create an account in these apps. While creating account the app ensures that user has a valid bank account linked with his/her mobile number. Once the account gets created user gets a unique UPI id which is just like a username and then he gets forwarded to a UPI’s page where he has to set a password of 4 or 6 digits which he’ll have to use for further transactions. Once this all is over user is ready to transact via UPI. The credentials i.e. bank account number and the password are stored in an encrypted format on the UPI’s database. When user tries to do a transaction to another UPI id or an account number through the app, app asks to enter the amount and after entering amount it asks the password. Once amount and password are entered they are forwarded as a packet in an encrypted form to interface and as the various banks’ servers are connected to the interface it forwards the packet to user’s bank server. The bank server then decrypts the packet, fetches the user’s account and checks whether he has sufficient balance to do the transaction. Then it verifies the password and deducts the amount from his account and credits it to recipient’s account and sends the feedback of successful transaction to that app. This is how the transaction is completed…I hope you understood my point..

Thank you…