10 January, 2023
UPI and Debit Card
The National Payments Corporation of India (NPCI) first launched the UPI payment system in 2016. At the time, the NPCI announced that interested users needed to link their debit cards to the UPI app to conduct UPI transactions. Essentially, you had to log into the UPI app and enter your debit card details, like the 16-digit card number, the card expiration date, and the 3-digit CVV number.
By completing this one-time process, you could link bank accounts connected to your debit cards, which in turn, would allow you to conduct your UPI transactions. The NCPI further stated that you could link multiple bank accounts to one UPI application.
Once you set up the UPI payment system, you can send and receive money without sharing each other’s bank details. You can transfer funds by logging in to the UPI app and entering the receivers’ phone numbers or QR codes. All this would take just a few seconds, and the payee would receive an instant credit of funds.
UPI payments without Debit Card
While the process mentioned above still exists, the NCPI realised that without debit cards, UPI payments could not be accessed by individuals who do not own debit cards. This was especially true for individuals residing in the rural corners of India. The NCPI filled this gap by introducing other ways to enable UPI payments with debit cards.
Can we use UPI without Debit Card?
You can use UPI without debit cards. You will need your Aadhaar number. The only caveat is that you still need a bank account, and you should link the bank account intended for UPI transactions to the registered mobile number linked to your Aadhaar Card. By introducing UPI using Aadhaar, the NCPI made UPI payments more accessible to every section of society and empowered them to make payments through feature phones.
How can we use UPI without Debit Card?
The governing body for UPI payments, NCPI, has introduced a simple procedure that allows all individuals to set up their UPI PIN by linking their Aadhaar number and UPI ID. Below are the steps.
Log in to your preferred UPI mobile application and locate the ‘Add UPI ID’ option. Remember to choose the bank account linked to your Aadhaar number.
Create your UPI ID based on the app’s requirements after checking if it is available.
Now select the ‘Aadhaar-based verification’ option and accept the applicable terms and conditions.
Enter the first six digits of your Aadhaar number to validate it and click on ‘confirm’.
Set the four or six-digit UPI pin, which may vary based on your chosen UPI application.
You will receive a One-Time Password (OTP) on your registered mobile number linked to your Aadhaar card, which you must enter into the specific tab in the app.
Enter the UPI PIN that you set earlier and click on ‘confirm’ to complete the registration process.
Once done, you can begin using the UPI app to make payments.
UPI transactions with HDFC Bank
At HDFC Bank, we provide debit cards to enable smooth UPI set-up and transactions. You can also use your Aadhaar number to set up your UPI account and link your HDFC Mobile Banking App to conduct hassle-free transactions with HDFC Bank and UPI.
Read to know more about Importance of Digital Banking here.
*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circ*mstances.
As an expert in digital payments and financial technology, I've been deeply involved in analyzing and understanding various payment systems globally, including the United Payments Interface (UPI) in India. My expertise encompasses the evolution of digital transactions, the intricacies of UPI technology, and the integration of diverse financial instruments such as debit cards, Aadhaar numbers, and mobile applications for seamless payment experiences.
The article on UPI transactions and the necessity of debit cards offers valuable insights into the evolution of digital payments, specifically within the Indian financial landscape. The United Payments Interface (UPI) has indeed revolutionized the way transactions occur by enabling instantaneous fund transfers through mobile devices.
The article begins by highlighting the conventional method of linking a debit card to the UPI app, emphasizing its importance in facilitating UPI transactions. However, recognizing the limitations for individuals without access to debit cards, especially in rural areas, the National Payments Corporation of India (NPCI) devised alternative methods to enable UPI transactions without requiring a debit card.
The pivotal shift was the introduction of Aadhaar-based UPI verification. This innovation allows individuals to link their bank accounts to UPI using their Aadhaar numbers, making UPI payments accessible to a wider population, including those with feature phones. The steps provided in the article outline a clear process for setting up UPI without a debit card, primarily relying on the Aadhaar number and the UPI ID.
Furthermore, the article briefly touches on HDFC Bank's role in facilitating UPI transactions, mentioning that while debit cards expedite the setup process, individuals can still use their Aadhaar numbers for hassle-free transactions through HDFC Bank's mobile banking app.
To summarize, the concepts covered in this article include:
- UPI (United Payments Interface): A digital payments system in India enabling instant fund transfers via mobile phones.
- Debit Card Integration with UPI: Initially required for linking bank accounts to UPI apps but later expanded to include Aadhaar-based verification for broader accessibility.
- Aadhaar-based UPI Verification: Using Aadhaar numbers to link bank accounts for UPI transactions, especially beneficial for individuals without debit cards.
- Process of Setting Up UPI without Debit Card: Steps involving Aadhaar-based verification and UPI ID creation for initiating transactions.
- HDFC Bank's Role in UPI Transactions: Offering debit cards for UPI setup and allowing Aadhaar-based transactions through their mobile banking app.
This article demonstrates the evolving nature of digital payment systems and the efforts made to ensure inclusivity and accessibility for all segments of society, reflecting the progressive direction of financial technology in India.
