UPI Transaction – What Is It, Advantages and Disadvantages

In this digitally advanced world, digital money transfer processes are the most popular for their convenience and hassle-free nature. You can conduct these cashless transactions in multiple ways.

Among them, probably the most convenient one is the UPI transaction. Follow the next segment to learn about it in detail.

What Is UPI Transaction?

UPI, or Unified Payment Interface, is the first step taken by India for cashless transactions. This accessible and convenient method can be easily done with the help of smartphones. UPI helps you to transfer money from one bank to another in real-time.

However, in this transaction, you won’t need to use any of your bank account details at the time of transactions but only a basic UPI PIN.

How Does UPI Transaction Work?

UPI transactions are becoming more popular due to their compatibility, and almost every Indian bank and payment application accepts this method. UPI transaction works with a simple process. Here are the steps for the same.

You will need a virtual payment address to carry out the transactions.
Once you create this with the required information, you will get a UPI ID.
Then, you need to generate a PIN and use that for seamless transactions.
As you set up your account, you can transact from your smartphone by using the Internet. However, you need to keep the linked bank account and mobile number

How to do a UPI Transaction?

To start a UPI transaction, you must first set up your account. To do so, follow the below-mentioned steps,

Setting up a UPI Account:

Step 1: Download a UPI application.

Step 2: Set up your language.

Step 3: Create a virtual ID by giving basic information such as name, address, and password.

Step 4: Go to the “manage bank account/add link” option to link your bank account number with your virtual ID.

Step 5: Now generate mPIN by sending a PIN generating a request to your bank.

Step 6: Put the OTP that your bank will send you in the proper box.

Step 7: Put the last 6 digits of your debit card number and the expiry date.

Step 8: Create a PIN and remember it for future transactions.

Step 9: Click on submit.

Sending Money by UPI Transaction:

Step 1: Log in to your UPI account.

Step 2: Choose the “send money/pay” option.

Step 3: The UPI transaction ID of the beneficiary’s account to be debited will be shown.

Step 4: Click on the confirmation message on the screen.

Step 5: Enter your UPI PIN.

Step 6: Transaction will take place, and notification of deducted money will come to your mobile number.

Requesting Money by UPI Transaction:

Step 1: Log in to your UPI application.

Step 2: Click on the “request money/payment” option.

Step 3: Give the virtual ID of the beneficiary’s account to be credited and the amount.

Step 4: Click on the confirmation message and give your UPI PIN.

Step 5: You will get the money if the receiver accepts the request.

What Is the Maximum Limit of UPI Transaction?

As of 2023, the maximum limit of transactions across all UPI applications is ₹ 1,00,000 per day. In addition, you can’t send money more than 10 times a day. Further, you will reach a daily maximum limit if you request someone more than ₹ 2000 in a day.

What Are the Advantages of UPI Transaction?

Here are the advantages of UPI transactions.

Easy and safe
No need to add details of a payee
No hidden or extra charges
A high upper limit of daily transaction
Easy transaction method for merchants
Users can use different bank accounts
Great help to avoid the hassle of carrying cash

What Are the Disadvantages of UPI Transaction?

Here are the disadvantages of UPI transactions.

Delay in payments due to network or bank server issues
Deducted money can take up to 48 to be credited again
Only 6 digit PIN may not be strong enough

Hence, these disadvantages are minor and easily avoidable compared with the huge benefits of a UPI transaction. Therefore, consider this guide to open your account if you are a new UPI user. However, you always need to maintain proper safety measures while transferring money via online mediums.

FAQs about UPI Transactions

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What safety measures can we take to do a UPI transaction?

To transact safely, you should remember your PIN, never share it with anyone else and change it frequently for better security. In addition, you can also seek help from the help section of UPI applications. Further, you should use two-factor authentication.

Does UPI transaction Show in bank statement?

Yes, UPI transactions will be visible in your bank statement. You will find the concerned UPI transaction ID and transaction dates, which you can match from your UPI app.

Is there any way to increase UPI transaction limits?

Unfortunately, there is no way to increase the limits of UPI transactions. This limit is set by the Indian Government, which is non-negotiable.