February 18, 2025 · 12 mins read
Santosh Kumar
The process of transferring money earlier used to be clumsy. While transferring money, the account holder must always enter the IFSC code, account number, and other information to register a beneficiary, which takes around 24 hours to get approved. The process is undoubtedly cumbersome when one has to do the same thing multiple times. However, with UPI, the process of transferring funds has become easier. The meaning of UPI ID is that it is a Virtual Payment Address (VPA) generated for a bank account holder.
Today, numerous UPI-enabled applications exist in the country, such as PayTM, Google Pay, PhonePe, etc. Therefore, if you need to know "What is UPI ID for my profile?” check the profile section of these apps. In addition, the National Payments Corporation of India has developed BHIM (Bharat Interface of Money). All these applications have simplified fund transfers for the nation.
In addition, banks have also created customised and easy-to-use UPI-enabled applications for their customers.
A typical UPI ID looks something like this:
yourname@bankname
For example, if your name is Shyam Patel and your bank with SBI, your UPI ID could be shyampatel@sbi.
When signing up for a UPI-enabled app, such as Google Pay, PhonePe, Paytm, or any bank's UPI app, you must generate a UPI ID. A UPI ID is a unique virtual payment address (VPA) that will act as your digital identity while conducting transactions.
1: A typical UPI ID is yourname@upi or mobilenumber@bankname.
2: Bank Linking: The UPI ID is linked directly to the bank account; hence, one can make easy transactions without requiring the entry of bank details at every transaction.
3: Multiple UPI IDs: For convenience, the user can link multiple UPI IDs to the same bank accounts or even other apps.
Read More:: Amazon Pay UPI Pin Change
UPI simplifies the money transfer process by eliminating the need to write lengthy information such as an account number, IFSC code, or even the branch name. Money can be sent instantaneously using only the recipient's UPI ID.
Here is how to send money via UPI:
1: Open your UPI-enabled app.
2: Tap on "Send Money" or "Transfer".
3: Enter the recipient's UPI ID or scan the recipient's QR code.
4: Insert the amount and continue.
5: Authenticate the transaction using your UPI PIN.
6: The amount is immediately debited from your account and credited to the recipient's account.
The daily limit differs from bank to bank but generally stands at ₹1 lakh per transaction/day. For small-value transactions of ₹200 or less, UPI PIN authentication might not be necessary in some cases for faster processing.
Read More:: Difference Between RuPay Credit Card and Visa Credit Card
Getting money by sending UPI: Getting the amount is easy, too. Just mention your UPI ID to the sender and ask him to make the direct bank transfer through this application from your bank account linked to his.
The process for receiving money via UPI:
1: Provide UPI ID.
2: The sender initiates the fund transfer via the sender's UPI app
3: Immediate crediting directly into bank accounts.
4: Alert through SMS, message or applications regarding the complete transaction.
5: Some UPI apps allow users to send " payment requests" to others and ask them to accept and pay the amount.
6: The recipient may accept or decline the request as per their choice.
Read More:: How Much Money Can We Transfer Through PhonePe?
UPI IDs are accepted at almost all places, be it online shopping or even local shopkeepers, such as:
1: E-commerce websites like Amazon, Flipkart, and Myntra offer UPI payment facilities. Choose "UPI" as the payment option, input your UPI ID, and confirm from your UPI application.
2: Electricity, Water, Gas, and Mobile bills can be paid directly through UPI apps without accessing bank portals.
3: Auto-pay for reoccurring bill payments
4: Retail & Local Shops: Scan a QR code of a merchant, whether Google Pay, Paytm, or BHIM UPI, for immediate payments. No need to carry any cash or cards, making it easy for easy contactless transaction
5: Subscription Payments: Platforms such as Hotstar, Spotify, and even Netflix allow payment through UPI autopay as a monthly recharge.
UPI mandates ensure smooth, back-to-back, seamless payments without further approvals.
Read More:: How to add money in Phone Pe wallet?
Transactions through the UPI are highly secure, involving multiple layers of authentication and encryptions; a few measures are:
1: Authorisation is achieved by entering a 4- or 6-digit PIN on every transaction, which prevents unauthorised actions. The PIN created during registration processes should never be shared with anyone.
2: Two-Step Authentication - 2FA
3: Transactions require both the UPI ID and PIN, ensuring security.
4: Some banks also use biometric authentication (fingerprint or Face ID) for added protection. Dynamic QR Codes: Scanning an official merchant QR code reduces the risk of fraud.
5: SMS and App Notifications: Every transaction generates real-time alerts for transparency. Report Fraudulent Transactions: If an unauthorised transaction occurs, users can report it immediately through the UPI app or bank.
Unified Payments Interface, or UPI, changed the Face of digital transactions entirely in India, making it efficient, smooth, and secure, making millions' lives even more straightforward. A few taps into your smartphone - pay for your groceries, purchase online, transfer money to any friend - so simple with the help of UPI's pillar of cashless payments. But do you know how behind-the-scenes magic happens? Alright, let us break it all down stepwise.
Read More:: What is YBL in UPI?
It all begins with installing a UPI-enabled app such as Google Pay, PhonePe, Paytm, or BHIM. On installation, one has to register and link their bank account with the application. A Virtual Payment Address (VPA), a unique name such as user@bankname, is created for registration. The VPA is an online identity that does not require sharing complex bank information during transactions.
Users are offered multiple options at the time of making a payment:
1: Entering the VPA of the recipient, say, merchant@bankname
2: Scanning a QR code to make a fast payment
3: Using a mobile number associated with UPI
For instance, if you are standing at a local shop, you can scan the merchant's QR code and input the amount to be paid, and the process is quick and easy.
Security is one of the most important aspects of UPI transactions. Users are required to input their UPI PIN—a safe six-digit code set at the time of registration—before making the payment. This guarantees that only the account holder can approve transactions, providing an important layer of security against fraud.
Read More:: How to Check CIBIL Score on Phone Pe
1: On the entry of the UPI PIN, the application requests a payment from the UPI server. This request is authenticated and processed in real-time through messaging with both:
2: The bank issuing the money (the user's bank, where the money will be debited)
3: The acquiring bank (beneficiary's bank, where the funds will be deposited)
Such is the architecture of UPI. It finishes transactions in a matter of seconds.
After processing, the sender and receiver immediately receive feedback about the transaction status. A user can get a message, for example, like this: "Merchant@bankname received ₹500 payment successfully."
This provides real-time feedback that removes any doubts, making electronic transactions more transparent and credible.
For customers who observe accounting immediately, end-to-end inter-bank settlement happens in a few hours. UPI architecture has eased fund transfers amongst banks while maintaining the genuineness of the banking system.
Read More:: How does UPI Mandate Work
UPI has been a game-changer for digital payments in India. The system has made transactions smoother by offering a smooth, secure, and effective means. Some of the core features of UPI ID transactions that have made the platform a hit for daily payments are explained below.
Immediate transfers: The transfers in the UPI payment system happen in a few seconds.
Any–time transaction: The UPI payment system supports transactions 24 hours a day, 7 days a week. Its digital and cashless nature permits instant transactions that can even be processed on a public holiday.
One app for multiple accounts: You can have one UPI payment application for all bank accounts. Every account will have a separate transaction sheet. You can install each account by entering their bank details. You can even have one UPI PIN for all accounts.
VPA: A virtual payment address is a unique ID used to initiate transactions. The bank provides this ID when the user applies for online banking.
UPI ID: To create a UPI ID, one needs to register with the payment application using bank account details like account number, mobile number, and IFSC code.
UPI PIN: The most critical feature of UPI transactions is the PIN, which is used to authenticate each payment made by the user through the payment application.
MPIN: mobile banking personal identification number
USSD service: UPI also has a USSD service, where users dial *99# and select the service they want to use, such as requesting and sending money, fund transfer, mobile banking, etc.
Low cost: This costs 0.50 each time.
Bill sharing: When you dine out with your friends or colleagues, you have a combined bill to pay. You can use UPI payment to split the bill and pay your share.
QR codes and Barcodes: The UPI payment app enables users to pay via scannable codes with the receiver's UPI ID. Scanning the code directs you to the receiver's VPA, where you can then input the amount and UPI PIN to make the payment.
Big bills: even big utility bills can be easily paid using the UPI payment system effectively, and at the same time, a short statement would be required.
Complaints: These payment apps are open to users' complaints, so they can keep updating their apps to meet users' requirements. You can enter the complaints directly into the application.
Limit: UPI every transaction limit is a maximum of 1 lakh.
Read More:: MDR Charges on Rupay Credit Card
UPI ID has a lot of benefits, some of which have been listed below:
Real-Time Transfers: UPI transactions are pretty real-time transactions, so payments are guaranteed to be processed in a mere matter of seconds. Traditional bank transfers take hours or even days; hence, in cases of urgency, UPI transfers are done within seconds.
No Bank Details Requirement: As the UPI system is so robust, the a need to provide long, cumbersome bank details, such as IFSC codes, account numbers, and branch information, while using UPI. Money can be sent/received using a UPI ID, mobile number, or QR code. Transactions through UPI and checking the UPI limit as well are easy.
Secure & Reliable: Multi-layer encryption and two-factor authentication with the UPI PIN make transactions on UPI highly secure. Every transaction is verified before processing, reducing the chances of fraud and being unauthorised.
Availability of UPI ID is 24/7: The 24/7 availability of UPI, including weekends and bank holidays, was a much-needed option for globalisation. It makes it very convenient for users who need to make payments anytime. In this case, the traditional banking system of holiday delays remains defeated.
Multiple Bank Accounts: UPI eliminates the hassle of having to use more than one banking application and permits just one UPI application to link many accounts. Users can then select the account for their transaction, thereby enhancing financial management and flexibility.
Nil or Low Fees: Most UPI transactions are free or almost free, hence pocket-friendly compared to NEFT, RTGS, or IMPS. This has enabled their use for both personal and business purposes.
Read More:: Rupay Credit Card UPI Charges
It is nothing short of revolutionary how UPI has become a mode of payment in India. Introduced as recently as 2016, UPI became the preferred choice of millions almost overnight. The government's push towards a digital economy and ease of use has contributed to the exponential growth of transactions through UPI. The number of transactions crossing billions monthly reflects the spread of UPI in both urban and rural belts.
Small, local vendors and large corporates widely accept UPI. Its acceptance for seamless transactions with no extra cost for hardware has been an alluring option for merchants. Today, UPI-based transactions have outpaced those on debit/credit cards in many places, showing a sharp shift in the way consumers transact.
What happens if I send money to the wrong UPI ID?
If the wrong UPI ID is used and the payment is processed, it is nearly impossible to undo the transaction. Always check details before confirming any payment.
What is VPA?
VPA stands for Virtual Payment Address. Your VPA is the same as your UPI ID.
Can I link multiple accounts to my UPI?
Yes, you can link multiple accounts to your UPI and select which bank account to use to make payments or receive money through UPI.
Can I deactivate my UPI ID?
You can deactivate your UPI ID by delinking your bank account using your UPI app or contacting your bank.
Does UPI have a transaction limit?
Yes, most banks have a daily transaction limit for UPI payments. This usually varies between ₹1 lakh and ₹5 lakh, depending on the bank and the form of transaction.
Download the app now
Download the app from PlayStore
