Unified Payments Interface (UPI) : Detail Analysis


India's payment system has undergone significant advancements in recent years, driven by digital innovation, regulatory support, and a growing emphasis on financial inclusion. The country has become a global leader in digital payments. Here’s an overview of the latest advancements and the architecture behind them:


1. Unified Payments Interface (UPI)

Introduction: UPI is a real-time payment system developed by the National Payments Corporation of India (NPCI) that facilitates inter-bank transactions. It allows users to transfer money between bank accounts using a mobile device, with just a Virtual Payment Address (VPA).

Architecture:

Client Layer: The client-side includes UPI-enabled mobile apps like Google Pay, PhonePe, Paytm, and others. Users interact through these apps, which provide interfaces for initiating transactions.

Middleware: UPI acts as the middleware that connects multiple banks, providing interoperability and ensuring that transactions are processed in real time.

Bank Layer: Each bank involved in the transaction has a UPI-compliant infrastructure that interacts with the UPI platform for transaction processing.

Security: UPI uses two-factor authentication (2FA), where the first layer is the mobile number verification, and the second is the UPI PIN.

Advancements:

UPI 2.0: Introduced features like linking overdraft accounts, one-time mandate, invoice in the inbox, and signed intent/QR.

AutoPay: Enables recurring payments, such as subscriptions.

Internationalization: UPI is being integrated with payment systems in other countries, enhancing cross-border payments.

Flow diagram 


1.User interacts with the UPI-enabled Mobile App to initiate a transaction.

2.The UPI App sends the transaction request to the UPI Platform (NPCI).

3.NPCI forwards the request to the Sender's Bank.

4.Sender's Bank debits the user's account and notifies NPCI.

5.NPCI then forwards the request to the Receiver's Bank.

6.Receiver's Bank credits the receiver's account and notifies NPCI.

7.NPCI confirms the transaction to the UPI App.

8.UPI App notifies the User about the transaction status.

workflow : 


Advantages:

  1. Convenience: UPI allows for instant money transfers 24/7, without needing bank details. Users only need the recipient’s UPI ID or phone number.
  2. Low Cost: Most UPI transactions are free, making it a cost-effective option compared to other payment methods.
  3. Security: UPI is secured with two-factor authentication, which includes a mobile number verification and a UPI PIN.
  4. Wide Acceptance: UPI is accepted across various platforms and merchants, including e-commerce sites, retail stores, and service providers.
  5. Integration: UPI can be linked to multiple bank accounts and can be used through a variety of apps, offering flexibility and ease of use.

Disadvantages:

  1. Dependency on Internet and Smartphones: UPI requires an active internet connection and a smartphone, which can be a limitation for users in areas with poor connectivity or those without smartphones.
  2. Transaction Limits: UPI has a daily transaction limit, which may not be sufficient for high-value transactions.
  3. Technical Glitches: Users may experience failures or delays in transactions due to technical issues with UPI servers or the involved banks.
  4. Complexity for New Users: The initial setup and understanding of UPI can be complex for users who are not tech-savvy.
  5. Merchant Charges: Some merchants may pass on the UPI transaction charges to customers, making it less appealing for certain transactions.

Risks:

  1. Fraud and Phishing: UPI users may be vulnerable to phishing attacks and scams where fraudsters trick them into sharing their UPI PIN or OTP, leading to unauthorized transactions.
  2. Data Privacy: With multiple apps accessing bank details and transaction history, there is a risk of data breaches or misuse.
  3. Technical Vulnerabilities: Potential security flaws in the UPI system or related applications could be exploited by cybercriminals.
  4. Human Error: Incorrectly entering UPI IDs or mobile numbers can result in funds being transferred to the wrong account, and recovering such funds can be difficult.
  5. Over-reliance on Technology: Any disruptions in internet connectivity, server downtime, or software bugs can temporarily halt UPI services, affecting users.

Reference Document:


Comments

Post a Comment

Popular posts from this blog

Postman Automation with Newman

Image
 Introduction Newman:  The tool that allows us to make the bridge between the Postman App and any CI/CD server is called: Newman. Newman is the CLI companion of Postman,and it can execute Postman collections (as files or from links). Newman Installation: Prerequisite  : Node.js (Java script Run time environment) Link to download :  https://nodejs.org/en/download/package-manager/ > node --version to check Node.js is downloaded or not  To install Newman : https://www.npmjs.com/package/newman >npm install -g newman >newman --version if getting error as :  "File C:\Users\xyzz\AppData\Roaming\npm\newman.ps1 cannot be loaded because running scripts is disabled on this system. For more information, see about_Execution_Policies at https:/go.microsoft.com/fwlink/?LinkID=135170. At line:1 char:1 + newman --version + ~~~~~~     + CategoryInfo          : SecurityError: (:) [], PSSecurityException     + FullyQua...
Read more

Postman Test Automation with Teamcity

Image
 Teamcity Architecture: Teamcity Installation : Follow this Page for Teamcity Installation. https://www.jetbrains.com/help/teamcity/quick-setup-guide.html Step 1: Check if agent is present or not  Administration > Create Project >Manually (Name ,Project_id)>Create Step 2: Build configurations > Create Build configuration >Manually(Name,Build configuration_id) >create Step 3: New VCS Report  If we are using github repo to pull code we have to this setup Repository url username password  >  Create Step 4: Go to Build Steps > Add build step>command line >step name ,Execute step , Custom script :  node --version                            npm --version                                  newman --version Step 5: Add another build steps (Build config>build steps) ...
Read more