PSP in UPI: How to Register PSP in UPI

With the changing landscape of a digitally enabled world, UPI PSPs have taken the Indian financial market by storm. Today, people want quicker, more seamless, and more secure transactions. As a business owner, whether you run a small business or a large organisation, it’s important to understand what PSP in UPI is, its benefits, and everything in between.

What is a PSP?

With a PSP, Payment Service Provider, businesses can process payments from customers. Think of it as an intermediary between a business and the bank’s network to help the merchant’s customers make and process payments securely.

A PSP will provide you with a range of services for online and offline transactions. You:

• Get a payment gateway for securely connecting your mobile app or online store with payment methods
• Protect all your business transactions from scams and financial fraud
• Track your business sales with insights and comprehensive reports to make better business decisions

What is a PSP in UPI?

The role of PSP in UPI is to serve as an intermediary between banks, customers, and other service providers for a safe, smooth, and efficient payment process. Here’s a detailed explanation of the role of a PSP in UPI to help you understand better:

1. Transaction Processing

   With PSPs, UPI transactions can be processed through websites or mobile applications. The process of UPI transactions becomes simpler, where a customer can seamlessly enter their transaction details like transaction amount and recipient’s mobile number or UPI ID.

2. User Onboarding

   PSPs in UPI help with user onboarding by initiating the registration process. They do this by collaborating with banks and tracing back the user’s bank account details in the UPI system.

3. Security

   PSPs go the extra mile to safeguard your data and transactions. They rely on advanced security features like two-factor authentication, data encryption, and other protocols to keep sensitive information private and safe. Further, to enhance the security of the payment processes PSPs team up with banks to verify and authorise transactions. This increases the blocking of fraudulent activities and safeguarding your customer’s payment journey.

4. Customer Support

   PSPs help in providing customer service for UPI-related transactions held on your websites or applications. They can fix payment issues, answer your questions, and help out if a transaction fails or a dispute arises. PSPs make sure you have access to dependable and user-friendly support channels, so any concerns with your UPI transactions can be resolved quickly.

5. Settlement of Payment

   After the completion of the UPI transaction on your website, PSPs step in to handle the settlement process. They work with both the sender’s and recipient’s banks for a secure and prompt fund transfer process. To keep users in the loop, PSPs also share important details like receipts or confirmation messages, giving you a clear record of the transaction.

What are the Benefits of Using PSP in UPI?

Merchants and users both benefit from using PSP in UPI. The main advantages include:

1. Broadened Usage

   With PSPs, UPI transactions become more widely available across online and offline channels. Whether you run a retail store, a restaurant, an e-commerce platform, or handle utility payments, PSPs ensure your customers have a seamless payment experience.

2. Convenient Payments

   As a business, providing convenience to your customers at every step of their shopping journey is necessary. PSP in UPI does exactly that. With a user-friendly and intuitive interface mixed with a seamless payment gateway, users can make UPI transactions so smoothly without any hassles. This is especially great for businesses relying on online transaction platforms for receiving payments.

3. Secured Payments

   Through tokenisation, encryption, and authentication protocols, PSPs in UPIs can secure transaction processes. This leaves a mark of trust on customers as they make financial transactions on your website. PSPs even protect user data through advanced fraud prevention and detection systems for eliminating fraud risks.

4. Multiple Account Integration

   No more juggling between different bank accounts to make a payment! PSPs in UPIs allow businesses to give their customers the choice of linking multiple bank accounts for a more streamlined transaction process.

5. Transaction Tracking

   PSPs provide businesses with a key advantage: the ability for customers to view and track a detailed transaction history. With this, your customers can maintain precise expense records. This transparency enhances the financial control customers experience through your platform.

How to Register PSP in UPI

• Step 1 - Submit the application: The process of registering PSP in UPI begins with submitting a registration form with all the necessary documents to the regulatory authority.
• Step 2 - Check compliance: As a business, ensure your website and/or application meets all the requirements and rules set by the UPI framework for security standards.
• Step 3 - Approval process: After the compliance check, thoroughly check whether your PSP is verified and officially approved. This step is crucial to building trust and ensuring the system is secure.
• Step 4 - Set up user authentication: Implement a user authentication system that complies with UPI standards. This setup verifies users during registration and transactions, safeguarding the UPI ecosystem.
• Step 5 - Onboard third-party apps: When onboarding Third-Party Application Providers (TPAPs), double-check that they meet all required standards. This ensures user data and the UPI network remain secure, creating a safer experience for everyone involved.
• Step 6 - Comply with data storage rules: All payment data, including UPI transaction details, must be securely stored within India. This isn’t just about following data localisation laws—it’s about protecting sensitive user information.
• Step 7 - Integrate and begin testing: Post data storage compliance check, integrate your system with the UPI platform and carry out extensive testing. This step ensures everything runs smoothly and securely, ironing out any potential issues before launch.
• Step 8 - Go live and keep updating: The last step is to finally go live with your UPI service. But don’t stop just there. Regularly monitor compliance with the latest guidelines from the UPI governing body. Keep your systems updated to maintain top-notch security and efficiency.

FAQs:

1. Are there any limits on transactions made via UPI through a PSP?

   Yes, transactions made through UPI via a PSP have limits. These limits are set by the National Payments Corporation of India (NPCI) and can vary depending on the type of transaction.

2. Can I use PSP for online and offline transactions?

   Yes, PSPs can be used for both online and offline transactions. You can make seamless transactions through mobile apps, online platforms, POS devices, and more.

3. Is it possible to integrate multiple PSPs into a UPI payment gateway?

   Yes, you can integrate multiple PSPs into a UPI payment gateway. This setup allows users to select their preferred payment method while giving businesses greater flexibility and boosting transaction success rates.

4. What role does a PSP play in the UPI framework?

   A PSP serves as a bridge between users and their banks in the UPI system. It provides the technology and infrastructure needed to facilitate UPI transactions across different platforms, such as mobile apps, websites, and POS machines. PSPs are authorised by NPCI and must adhere to its guidelines to ensure secure and efficient transactions. Popular examples of PSPs include Freo Money, PhonePe, Google Pay, and Paytm.