December 12, 2024 · 11 mins read
Santosh Kumar
Digital payment has brought a paradigm shift in modern-day commerce. We are no longer reliant on physical cash to buy everyday items, send or receive money to a peer or merchant, and shop online.
When it comes to online payments, you must be privy to UPI (United Payment Interface), which has gained widespread popularity in recent years, especially after the coronavirus pandemic. Thanks to UPI, you can send or receive money in just a few taps. You must select the recipient on your UPI app, enter the amount you want to pay, and authenticate the transaction using a UPI pin. Your money will be transferred directly to the recipient's bank account in a matter of seconds.
This lightning-fast transaction is due to the use of a VPA (Virtual Payment Address) in your UPI. In this article, we will discuss a VPA address in detail.
VPA, or virtual payment address, is a digital ID assigned by payment apps to send or receive money hassle-free. VPA has further simplified online transactions by eliminating the need to enter bank account numbers, branch names, and IFSC codes while paying someone. The VPA is a single indicator that streamlines the payment process in a few clicks. A VPA address looks like username@bankname.
You can select your username, and the UPI app will assign a bank name, such as @ybl, @okicici, @oksbi, and so on.
VPA and UPI are essentially the same thing. The term UPI is associated with UPI apps that allow you to pay or receive from another individual who also has a UPI address. Both terms are used interchangeably, though VPA is a more technical term while UPI is used in common parlance.
Thus, when someone asks for your UPI ID, they are asking for your virtual payment address. Both are the digital addresses to your bank account and unique identifiers to send and receive funds.
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VPA is a virtual payment address that facilitates real-time interbank transactions through a smartphone. The National Payments Corporation of India (NPCI) established UPI payments in India, and the Reserve Bank of India is the regulatory authority in this regard. UPI works as an immediate payment service where funds are transferred in a matter of seconds, though there is a lower limit of transactions than under NEFT.
You can send or receive funds directly to and from your bank account using VPA, provided that both parties are registered on a UPI app. However, if the payee is not registered on a UPI app, the payor will have to obtain their bank account details, IFSC, and mobile number to complete the transaction.
Your VPA, or UPI ID, is automatically created when you register on a UPI app. Once you download the UPI app from PlayStore or Apple Store, you only need to link your bank account and registered mobile number. Here is how you can create your own VPA on any online payment app:
1: Launch the UPI app on your smartphone. The app may either be a mobile banking app which has a UPI payment facility or a third-party app
2: Link your bank account and the mobile number registered with that account on the UPI app
3: You may have to fill in additional details once you have linked your account.
4: Next, you will be provided with a list of options to choose between UPI ID and VPA
5: You may either select a preset option or create your own VPA
6: Set a 4-digit or a 6-digit UPI PIN to authenticate transactions. Do not reveal your UPI pin to anyone else
7: Once your UPI PIN is set, you can make payments hassle-free.
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Besides knowing what VPA is in UPI and what its function is, you must also know how to send and receive money using your virtual online address. Follow the steps below to send money using VPA:
1: Launch the UPI app on your smartphone
2: Click on 'Pay UPI ID'
3: Enter the recipient's VPA or UPI ID
4: Choose 'Pay via UPI' or 'Pay via VPA' or any other similar option on your online payment app
5: Enter the amount and add a note if you wish to
6: Enter the amount you want to send and click on 'send.'
7: Review all details and make sure you have entered the correct UPI ID of the recipient and the amount.
8: Verify your transaction by entering your UPI pin
9: The payment will be instantly processed
Once you click on send, the amount will be deducted from your bank account, and you will receive a message confirmation. The transaction will also show up in your app's transaction history.
If you have received a message of debit from your bank account but have not made the payment yourself, click on the link in the SMS you received. This will redirect you to your bank's fraud prevention page. Follow the next steps as promoted to protect your account from further unverified payments.
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There are multiple ways you can receive money on UPI apps.
Option 1. Share your VPA with the sender. The sender will follow the same steps above to send money to you with a UPI app.
Option 2. If you do not know the contact details of the person you want money from, you can send them a request from your VPA. Enter the VPA of that person, enter the amount, and add a note as a remark. The sender will receive a payment request on their UPI app. They will simply have to click on 'Pay' and authorise the transaction using their UPI pin.
Either way, you will instantly receive the amount in your bank account and an SMS on your registered number specifying the same.
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\VPA has revolutionised traditional transactions and has eliminated the need to carry liquid cash. Using VPA to pay or receive funds has several benefits, including:
With UPI or VPA transactions, you do not need to enter the recipient's bank account details, branch name, and IFSC code. You can simply enter the recipient's VPA address, the amount, and your UPI pin, and the payment will be completed. This helps you send money instantly in just a few clicks during an emergency.
All payments made through VPA are entirely safe and secure. They provide an added layer of protection via UPI pin or biometric. Sensitive data like bank account details or any other credentials are not shared. This gives you peace of mind, knowing your transactions are secured.
With VPA, you can pay merchants and send or receive money at any time of the day or week. All you need is a bank account, a registered mobile number, and an internet connection to use VPA. Such a round-the-clock facility has eliminated the dependence on payments limited by banking hours and provides a much-needed backup during emergency rent or bill payments at the last minute.
Another significant benefit of changing your VPA to another account or creating a new one for your additional bank account. However, remember that you cannot change or remove your bank account once you have linked your bank account to a VPA. As per RBI regulations, you will also not be able to link a single account to multiple VPA.
VPA has garnered widespread acceptance in India and is used across the nation. Many banks and non-banking financial institutions provide virtual payment services. Small-to-large merchants and vendors have also started using VPA, which means you can pay money to anyone without hassle.
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Paying or receiving money with VPA does not require advanced knowledge or technical skills. Using VPA is utterly simple for almost everyone. Once you have linked your bank account, sending money with UPI is almost like sending a message. Follow the steps mentioned above to send money from your UPI app. Moreover, these apps have an intuitive and simple interface to check balance, transaction history, recharge, pay bills, and more.
UPI has the upper hand when it comes to transferring funds online. UPI allows cashless payments of up to Rs. 1 lakh per day on peer-to-peer transfers. Thus, you can pay friends, families, colleagues, and even employees with minimum details. All you need is their UPI ID to transfer the desired amount.
On the other hand, internet banking requires you to know the recipient's bank account details to transfer funds. The process is more time-consuming and prone to errors. With VPA, you can transfer funds in a few clicks if you know the recipient's VPA.
National Electronic Fund Transfer (NEFT) is a way to transfer money between bank accounts directly. This mode of payment does not require the sender or the receiver to register on a UPI app.
While UPI is simpler and less time-consuming than NEFT, note that the latter has a higher transfer limit. NEFT allows you to send up to Rs. 10 lakh per transaction, although banks may allot a higher or lower limit. With UPI, you can only send Rs. 1 lakh per day.
Another point of note is that to enable NEFT, you must pay a minimum of Rs. 15 for activation. This is not the case with UPI payments, which are absolutely free.
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Now you know what VPA means in UPI. While banks and NBFCs more commonly use VPA, merchants and customers use UPI. Both mean the same thing and have the same function—facilitating seamless transactions.
When you have a registered VPA, you can send and receive money without going through the hassle and time-consuming process of Internet banking or NEFT transfers. If you are not using VPA already, now is the time to switch to a safer, quicker, and hassle-free mode of payment.
What is VPA?
VPA stands for Virtual Payment Address. It is a unique online identifier created by your bank for you. The VPA acte as an online address to your bank account to send or receive funds instantly. With VPA, you can enjoy cashless transactions with merchants and peers.
Do I need to enter bank account details to use VPA?
No. You do not need to enter bank account details or any other financial or personal information. All you need is the VPA of the payor or the payee to receive or send funds.
Is it safe to use VPA?
Yes. Payment via VPA is absolutely safe, and you do not have to worry about sharing your UPI ID with anyone. All payments made or received by VPA conceal your bank account number and mobile number, which means you can complete transactions without sharing confidential details.
Can I share my VPA with third-party apps?
Yes. You can share your VPA stress-free with merchants, peers, and third-party applications. With UPI, you can transfer funds to and from your bank account, pay merchants, and shop online without sharing any confidential details like your bank account number or IFSC code.
Can I use the same VPA on another UPI-enabled app?
No. Every UPI app confers a distinct VPA to the user. So, you may have one bank account, but if you have linked it with multiple UPI apps, you will have to create separate UPI IDs for each. You cannot use the same VPA for multiple apps. Each bank has its own VPA, so you will have a different payment address on each app.
Is VPA the same as UPI?
Yes. A virtual payment address (VPA) is the same as a Unified Payment Interface (UPI). A UPI is a unique identifier for your bank account to send or receive funds, the same as a VPA.
Are UPI payments free of cost?
Yes. Currently, UPI payments are free of cost on all apps.
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