### Explore the interrelationship between UPI, payment links and payment gateways
##### 1. what is UPI
UPI (Unified Payment Interface) is a real-time payment system regulated by the Reserve Bank of India (RBI) that allows users to make peer-to-peer transactions without having to enter their bank details at the time of each payment.
#### 2. UPI interoperability
NPCI (National Payments Corporation of India) has launched UPI Interoperability Pilot, with UPI number, users can create an 8-10 digit code and use it in any UPI application. By 1 December 2021, all UPI applications will have to be UPI ID compliant.
##### 3. What is the payment link
Payment Link is an online payment method that allows users to complete transactions through their chosen UPI application or any available NEFT/IMPS/RTGS option by sending a unique URL to a secure payment page.
##### 4. what is a payment gateway
A payment gateway is a service provider that securely transfers funds between a customer and a merchant, acting like a middleman and providing a secure environment that prevents the disclosure of sensitive customer information, such as card details.
##### 5. Is UPI a payment gateway?
UPI is a simple interbank transfer network, while payment gateways are a subset of payment service providers (PSPs) with multiple underlying processes and steps. While the ultimate goal of both is to facilitate payment transfers, UPI is simpler.
##### 6. UPI, payment links vs. payment gateways
- **Transaction fees**: Payment gateways typically charge a transaction fee of about 2.01 TP3T, while UPI and Payment Links have lower transaction costs, thanks to the government-mandated zero merchant discount rate (MDR).
- **Fund Settlement Time**: Payments through payment gateways can take 1-3 days to arrive, whereas UPI's fund transfers are almost instantaneous.
- **Open Infrastructure**: UPI is open and allows technology companies to build applications to manage users' bank accounts.
- **Float or interest**: Payment gateways may earn float or interest until the funds are settled.
##### 7. Which industries could benefit from UPI and payment links
- **B2B platforms**: B2B businesses in particular can benefit from UPI and payment links as they can save significant transaction costs.
- **Logistics and Trade**: The logistics and trade industries need to track payments and expenditures, and UPI and Payment Link provide a more efficient solution.
- **POS payments**: Merchants and shop owners encourage the use of UPI-based QR codes or links to avoid fees on credit and debit card transactions.
Through this paper, we have explored UPI, Payment Links and Payment Gateways in detail and understood their interrelationships and comparisons.
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