UPI, AEPS, USSD

M1-R5.1 & CCC · Chapter 8: Digital Financial Tools and Applications · 8 min read

UPI:- [ Unified Payments Interface ] :-

  • UPI, which stands for Unified Payments Interface, is an instant real-time payment system developed by the National Payments Corporation of India (NPCI) that allows users to instantly send and receive money between bank accounts using a mobile phone.
  • Perday transaction limit up to 1,00,000 (1 lakh) the transaction limit (24x7 and all public holidays)". 

Popular UPI Apps

  • Google Pay
  • PhonePe
  • Paytm
  • BHIM

Key Features of UPI

  • Instant money transfer (24×7, including holidays)
  • No need to enter bank account details every time
  • Uses a unique UPI ID (e.g., name@bank)
  • Supports person-to-person (P2P) and person-to-merchant (P2M) payments
  • Works directly with your bank account
  • Works with multiple banks in a single app
  • Secure with UPI PIN authentication

How UPI Works

  1. Link your bank account to a UPI app.
  2. Create a UPI ID (Virtual Payment Address).
  3. Set a UPI PIN.
  4. Send or receive money using:
  • Mobile number
  • UPI ID
  • QR code
  • Bank account details


 

:Some Questino on UPI:

Q1. UPI was developed and operated by:    A) RBI   B) SEBI   C) NPCI    D) SBI

Q2. UPI is built on which banking system for fund transfers?   

                     A) RTGS only   B) NEFT only   C) IMPS   D) SWIFT

Q3.What is the full form of VPA in UPI?   A) Virtual Payment Address    B) Verified Payment Account   

                                                                    C) Virtual Personal Account   D) Verified Personal Address

Q4. Which organization regulates UPI in India?     

                       A) NPCI  B) Ministry of Finance  C) Reserve Bank of India (RBI)   D) NITI Aayog

Q5. Which feature allows a merchant to collect payment from a customer through UPI? 

               A) Push Transaction    B) Pull Transaction    C) RTGS Request   D) Electronic Clearing Service (ECS)

Q6. Which protocol enables interoperability among different banks on UPI? 

                 A) NPCI Switch     B) IMPS Infrastructure  C) UPI Switch   D) All of the Above

Q7. What is the primary purpose of a UPI Handle such as "user@bank"? 

      A) Encrypt transactions   B) Act as a Virtual Payment Address   C) Store transaction history   D) Generate OTPs

Q8. UPI supports which of the following transaction models?   

    A) Person-to-Person (P2P)        B) Person-to-Merchant (P2M)    C) Both P2P and P2M     D) Neither

Q9.. UPI Lite is primarily designed for:    A) International payments           B) High-value transactions 

                                                          C) Small-value transactions with faster processing      D) Corporate banking

Q10. Which of the following statements is TRUE?         

                A) UPI works only during banking hours      B) UPI requires sharing account details for every payment
              C) UPI enables real-time fund transfers 24×7             D) UPI can be used only on smartphones

ANSWERS:       Q1: C) NPCI              Q1: C) IMPS           Q3. A) Virtual Payment Address 

                               Q4. C) Reserve Bank of India (RBI)     Q5. B) Pull Transaction (Collect Request)   

                               Q 6. D) All of the Above      Q7. B) Act as a Virtual Payment Address

                               Q8. C) Both P2P and P2M          Q9. C) Small-value transactions with faster processing 

                              Q10.   C) UPI enables real-time fund transfers 24×7

AEPS [ Aadhaar Enabled Payment System]:- 

  • AEPS is a secure Payment platform for financial transactions based on a unique identification number that enables a user for the cashless transaction. 
  • This system was developed by NPCI [National Payment Corporation of India] and released on 28 Aug 2014. 
  • It allows the user to perform banking transactions like balance inquiry, cash deposit, cash withdrawal etc. 
  • RBI has set a limit for transactions made through AEPS. Sum banks set a daily limit of maximum Rupees 10 to 15 thousand. 

Requirement for AEPS :- 

Aadhar number should be linked with a bank account.  

How to Use AEPS Services?- 

Step-1:-Visit micro ATM / Bank Mitra. 

Step 2:- Provided aadhar number and Bank name

Step 3:- Verification using Biometrics [Finger and eyes] 

Step 4:-Use AEPS Services.. 

The following Services offered by AEPS:  

  • Cash Deposit 
  • Balance  inquiry 
  • Aadhar to Aadhar
  • Cash withdrawal 
  • Mini-Statement 
  • Fund Transfer

1. UPI was developed and operated by:    A) RBI   B) SEBI   C) NPCI    D) SBI

USSD [Unstructured Supplementary Services Data] 

  • Dial * 99#
  • It is a communication protocol used by GSM [ Global system for mobile).
  • It is a technology platform through which information can be transmitted on all mobile phones with SMS facility. 
  • This payment service store *99£ on USSD channels.
  • This service allows mobile phones,there is no facility for using USSD based mobile such as be accessed in 12 different languages including Hindi and English Source (NPCI). 
  • The maximum fund transfer limit in this system is 5000 per day and 50000 per year.

How to Register for USSD Service :- 

1) Open a new account 

2) Mobile number should be linked with bank account.

3. Registered for USSD Mobile banking.

4) Get MMID [Mobile money identifier] 

5) Get [Mpin Mobile pin)