January 16, 2025 · 12 mins read
Santosh Kumar
Increasing digitization has heralded almost every aspect of our personal and professional living. One such revolutionary invention is the online transfer of money through a Unified Payment Interface. Developed by the National Payments Corporation of India (NPCI), UPI has transformed the entire payments landscape. It has become the cornerstone of all financial transactions with the salient attributes of efficiency, security and convenience. The interface is in a state of constant upgrades with new features being assimilated into the software regularly. One such heralding feature is the advent of the UPI ATM Cash Withdrawal feature. The introduction of such a feature has brought about dynamic changes into the banking ecosystem and thus further streamlining management of funds and enhancing security. In this article we will delve deep into the concept of UPI ATM Cash Withdrawal, its functioning, advantages, and its impact on the banking and fintech sectors.
Conventionally , while withdrawing cash from ATMs, customers make use of the required credit or debit card. The card is inserted into the ATM slot to initiate a transaction. However, with the UPI ATM Cash Withdrawal feature, users can simply withdraw money from ATMs without the need for a physical card. Instead, they use the UPI platform to authenticate and confirm the transaction. UPI ATM Cash withdrawal has further centralised the processing of a UPI account. One UPI ID can now help you make payments debited directly to the linked bank account. One can also link the UPI to a credit limit and all transactions will be processed from that fund without you having to carry multiple cards everywhere. And with the feature of UPI ATM cash withdrawal, the interface has gone even a step further and thus eliminating any need of carrying cumbersome physical cards. UPI ATM Cash Withdrawal enables users to leverage QR codes or OTP-based authentication to withdraw cash. This feature eliminates the dependency on cards, making it a revolutionary alternative for accessing cash conveniently.
Here is a step-by-step guide on how UPI ATM cash withdrawal works:
Firstly, the customer has to locate an ATM that offers UPI transactions. Banks have started rolling out ATM machines that are compatible with UPI transactions, thus enabling UPI ATM cash withdrawals.
The user needs to opt for the “UPI Cash Withdrawal”on the ATM cash withdrawal dialog display.
Once the UPI cash withdrawal option is selected, a QR code appears on the screen. The user scans this code using their UPI app, such as PhonePe, Paytm, Google Pay, or any other supported app.
The user now needs to enter the desired withdrawal amount into the field provided on the screen.
Once the amount is entered, the UPI app on the user's device will pop up with a confirmation prompt. It is used to authenticate the transaction using a PIN or biometric verification.
Upon successful authentication, the ATM dispenses the requested amount of cash.
The UPI ATM cash withdrawal is a unique feature and has various far-reaching perks and benefits. Below are listed some:
Read More:: How To Deactivate UPI ID?
The most important and considered focus of attention is the added layer of security and encryption that UPI atm cash withdrawal offers.. Traditional card-based transactions are susceptible to risks such as card skimming and PIN theft. By making use of the UPI interface at ATMs, the person has no stress of somehow getting the ATM PIN leaked to any peepers. By generating a unique QR code for initiating a transaction, the entire process becomes extremely personalized without any need of entering sensitive information. Transactions are authenticated via the user’s mobile phone and a secure PIN or biometric verification, ensuring a safer withdrawal process.
UPI ATMs cash withdrawal has absolutely eliminated any dependency on physical cards. Moreover, a person carries his phone almost every time he goes out. Therefore the chances of forgetting debit or credit cards or accidently losing them are reduced.Forgetting or losing your debit card is no longer a barrier to accessing cash. Especially when stuck in emergency situations, and in need of instant cash, UPI ATM cash withdrawals are an absolute boon. One can easily access cash without hassling with physical cards. It also reduces the risk of misplacing cards or dealing with damaged or expired cards.
By leveraging widespread internet connectivity and universal smartphone penetration, UPI ATM cash withdrawals have made accessing cash extremely inclusive. Individuals who may not carry cards frequently but have a UPI-enabled smartphone can still withdraw cash easily. This system has been a bridging gap between financial transactions and complex technological algorithms.
Read More:: Common Types of UPI Frauds in India and How to Avoid Them
As compared to conventional forms card-based payments, UPI ATM cash withdrawals are much faster. Just by opting for UPI enabled withdrawal at the ATM machine, the transaction gets initiated. The QR code is then displayed which can then be scanned on the linked device. Users may have to sometimes enter a unique transaction ID on the ATM screen within seconds.
UPI ATM cash withdrawals are beneficial to the banks in the aspect that it reduces overhead costs of issuing and maintaining physical cards. Users, on the other hand, can avoid fees related to lost or stolen card replacements. Furthermore, UPI withdrawals are nature-conscious in regards to the complete elimination of producing paper-based transcripts and receipts thus promoting eco-friendliness.
The entire digital ecosystem is aimed at centralizing all payment solutions under a single interface. This aim has thus resulted in ways through which we can carry most payments by making use of the UPI. In the same essence and for the same cause, UPI has assimilated and integrated ATM withdrawals with the interface to further facilitate efficiency. This also enables users to better manage their funds by tracking the statements and transaction history on a single app.
The contactless nature of UPI ATM cash withdrawals gained further traction during the COVID-19 pandemic. By eliminating the need to touch ATM buttons or card slots, this feature ensures a more hygienic transaction experience, thus addressing any issues of transmission through contact. This was the major accelerator that raised UPI ATM cash withdrawals to prominence.
Why are UPI ATM cash withdrawals gaining prominence? To understand this better, one has to foremostly study the technical and attributional differences between UPI enabled withdrawals and traditional ATM withdrawals. The same has been mapped out below:
Read More:: How To Unblock UPI ID?
Conventional withdrawals from the ATMs require the use of physical debit and credit cards. The cards are inserted into the machine slot to initiate a withdrawal prompt. Thereafter, by authenticating Personal Identification Number (PIN), the user can simply enter the desired amount which upon confirmation can be then withdrawn.
As opposed to traditional ATM transactions, UPI ATM cash withdrawals can only be processed from UPI-enabled ATMs. The user opts for UPI withdrawal on the ATM screen and is then flashed a QR code. Thereafter by logging into the UPI-enabled apps like PhonePe, Google Pay, or Paytm users can continue the process which involves scanning a QR code displayed on the ATM screen, entering the amount, and confirming the transaction using the app's UPI PIN.
While secure, traditional ATM transactions are vulnerable to card skimming, PIN theft, or losing the physical card. Misplacing the card can lead to unauthorized access if not promptly reported.
UPI ATM withdrawals are generally more secure. The absence of a physical card minimizes the risk of skimming or card cloning. Transactions are authenticated via mobile apps, which often include additional layers of security like biometric authentication or app locks. However, users must ensure their mobile devices and UPI credentials are safeguarded to prevent misuse.
Traditional ATMs are widespread, but the process is limited to users with a bank-issued card. Those without a card or with a damaged card cannot access cash via this method.
Read More:: IMPS vs UPI: A Complete Comparison of Digital Payment Solutions
UPI-enabled ATMs are designed to be inclusive. Anyone with a UPI account and a smartphone can withdraw cash, even if they don’t have a debit card. This feature is particularly useful in emergency situations where a card is unavailable. However, the availability of UPI-enabled ATMs is still growing and may not match the widespread presence of traditional ATMs.
Card-based transactions are straightforward but involve extra steps like inserting the card and typing the PIN. If the card is damaged, the process becomes cumbersome.
UPI-based withdrawals offer a quicker and more streamlined experience. With no card insertion or PIN typing required on the ATM keypad, users can complete transactions faster. Additionally, this method avoids wear and tear on debit cards, prolonging their usability.
Both methods may involve fees, especially when withdrawing from an ATM not affiliated with the user’s bank. However, UPI ATM withdrawals could become more economical as the system gains adoption, especially with reduced infrastructure requirements.
By enabling users to withdraw cash from ATMs using their mobile phones and UPI-enabled apps, this innovation brings convenience, security, and a host of transformative effects to both banking and fintech industries.
UPI ATM cash withdrawal eliminates the need for a physical debit or credit card to access cash. Users can generate a dynamic QR code via their UPI app, which is then scanned at the ATM to authorize transactions. This cardless process is particularly beneficial in situations where individuals forget their wallets or face issues like damaged or lost cards. Furthermore, the widespread adoption of UPI ensures seamless integration with existing apps, making it easier for users to access this service.
Cardless cash withdrawals via UPI significantly reduce the risks associated with card-based transactions, such as skimming, cloning, and PIN theft. The use of dynamic QR codes and multi-factor authentication through UPI apps enhances transaction security. Additionally, the one-time nature of the QR code ensures that even if the code is intercepted, it cannot be reused, adding an extra layer of protection for users. This heightened security is a win-win for both banks and consumers, fostering trust in digital financial services while reducing fraud-related losses for financial institutions.
Read More:: How to Transfer Money from UPI Lite to a Bank Account?
The adoption of UPI ATM withdrawals can reduce the dependency on physical cards, which are costly to produce and maintain. Banks can leverage this to lower operational expenses while promoting a sustainable alternative. Additionally, fewer card replacements due to loss or damage translate into reduced administrative burdens for banks. UPI ATM withdrawals also help in decongesting bank branches as more customers opt for self-service channels. By offering faster and more efficient solutions, banks can focus their resources on higher-value services and personalized customer experiences.
For the fintech sector, UPI ATM withdrawals represent a significant growth opportunity. Fintech companies can develop new services or integrate enhanced features within their existing apps to support UPI cash withdrawals. This innovation also expands the scope of UPI beyond digital payments, paving the way for further collaboration between banks and fintech firms. Moreover, the increased usage of UPI apps for cash withdrawals encourages users to explore other fintech offerings, such as investments, lending, and insurance, thereby broadening fintech's market reach.
In rural and semi-urban areas, where access to traditional banking services is limited, UPI ATM cash withdrawal can play a pivotal role. By enabling digital-savvy individuals to withdraw cash using their mobile phones, this technology bridges the gap between traditional banking and digital finance. The increased penetration of UPI apps can empower underserved populations, fostering greater financial inclusion.
Read More:: What is UPI Lite and How to Use UPI Lite?
The UPI ATM Cash Withdrawal feature is a testament to India’s rapid strides in digital banking innovation. By enabling cardless cash withdrawals, it combines the best of technology and convenience, empowering millions of users across the country. While challenges like infrastructure and digital literacy need to be addressed, the long-term benefits far outweigh the initial hurdles. As this feature gains traction, it promises to revolutionize the way we think about cash withdrawals and redefine the future of banking. With the right mix of technology, policy support, and user adoption, UPI ATM Cash Withdrawal could very well become the gold standard for ATM transactions in India and beyond.
1. Can I withdraw cash from an ATM using UPI?
Yes, you can withdraw cash from select ATMs using UPI with the "UPI Cash Withdrawal" option.
2. Do I need a physical card for UPI ATM withdrawal?
No, you can withdraw cash without a physical ATM card using your UPI ID and QR code.
3. Which banks support UPI ATM withdrawals?
Several banks, including SBI, HDFC, and ICICI, support UPI-based ATM cash withdrawals.
4. Is there a limit on UPI ATM withdrawals?
Yes, there is usually a limit per transaction, which varies by bank and ATM.
Download the app now
Download the app from PlayStore
