{"id":5461,"date":"2026-01-08T18:30:21","date_gmt":"2026-01-08T13:00:21","guid":{"rendered":"https:\/\/razorpay.com\/blog\/?p=5461"},"modified":"2026-01-09T00:59:13","modified_gmt":"2026-01-08T19:29:13","slug":"what-is-upi-and-how-it-works","status":"publish","type":"post","link":"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/","title":{"rendered":"What is UPI?: Unified Payments Interface Meaning, Features &#038; Benefits"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">UPI, or Unified Payments Interface, is a real-time digital payment system that allows users to send money, pay bills, and manage accounts through one app. This article explains what UPI is, how it works, and its key features, helping you understand its role in simplifying digital payments.<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ee9238dd35b\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ee9238dd35b\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#What_are_Instant_Payments\" >What are Instant Payments?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#What_is_Unified_Payments_Interface_UPI_in_Banking\" >What is Unified Payments Interface (UPI) in Banking?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Features_of_Unified_Payments_Interface_UPI\" >Features of Unified Payments Interface (UPI)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#How_Unified_Payments_Interface_UPI_Payment_Works_in_India\" >How Unified Payments Interface (UPI) Payment Works in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#UPI_Transaction_Flow\" >UPI Transaction Flow<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Participants_in_UPI\" >Participants in UPI<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#UPI_Security_and_Data_Protection_Measures\" >UPI Security and Data Protection Measures<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#UPI_Transaction_Limit_and_Charges_in_India\" >UPI Transaction Limit and Charges in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#How_to_Start_Using_Unified_Payments_Interface_UPI_Payments_in_India\" >How to Start Using Unified Payments Interface (UPI) Payments in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Benefits_of_UPI_for_Merchants\" >Benefits of UPI for Merchants<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Benefits_of_UPI_for_Customers\" >Benefits of UPI for Customers<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Are_Unified_Payments_Interface_UPI_Transactions_Safe\" >Are Unified Payments Interface (UPI) Transactions Safe?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#How_is_UPI_Different_from_IMPS\" >How is UPI Different from IMPS?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Why_is_Razorpay_the_Preferred_Payment_Gateway_for_UPI_Payments\" >Why is Razorpay the Preferred Payment Gateway for UPI Payments?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#What_is_UPI_20\" >What is UPI 2.0?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Features_of_UPI_20\" >Features of UPI 2.0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/razorpay.com\/blog\/what-is-upi-and-how-it-works\/#Frequently_Asked_Questions_FAQs\" >Frequently Asked Questions (FAQs)<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"What_are_Instant_Payments\"><\/span>What are Instant Payments?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Instant payments allow financial transactions to be processed and settled within seconds using modern payment systems like Real-Time Gross Settlement (RTGS) and Immediate Payment Systems (IPS). Many of these systems operate 24\/7, ensuring real-time fund transfers.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As a fast and secure alternative to traditional <a href=\"https:\/\/razorpay.com\/blog\/different-types-of-payment-methods\/\">payment methods<\/a>, instant payments play a key role in improving customer experience and boosting efficiency in digital finance.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_Unified_Payments_Interface_UPI_in_Banking\"><\/span>What is Unified Payments Interface (UPI) in Banking?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The full form of UPI is Unified Payments Interface, a real-time payment system developed by the <a href=\"https:\/\/razorpay.com\/learn\/national-payments-corporation-of-india-services\/\">National Payments Corporation of India<\/a> (NPCI) that facilitates instant money transfers between bank accounts via smartphones. UPI enables users to send and receive money, pay bills, and make online purchases seamlessly through a single mobile app.<\/p>\n<p>UPI eliminates the need to enter detailed bank information for each transaction, simplifying payments through <a href=\"https:\/\/razorpay.com\/learn\/what-goes-behind-a-qr-code\/\">QR codes<\/a>, <a href=\"https:\/\/razorpay.com\/learn\/what-is-virtual-payment-address-vpa\/\">virtual payment addresses<\/a> (VPAs), or UPI-registered mobile numbers.<\/p>\n<p>UPI works by leveraging existing systems, such as <a href=\"https:\/\/razorpay.com\/learn\/what-is-imps\/\">Immediate Payment Service<\/a> (IMPS) and Aadhaar Enabled Payment System (AEPS), to ensure seamless <a href=\"https:\/\/razorpay.com\/blog\/what-is-a-payment-settlement\/\">payment settlement<\/a> between bank accounts.<\/p>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/blog\/what-is-upi-lite\/\">What is UPI Lite? How Does it Work, and its Benefits<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Features_of_Unified_Payments_Interface_UPI\"><\/span>Features of Unified Payments Interface (UPI)<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li>UPI is a fast, real-time system that is available 24*7, 365 days of the year, enabling money transfer and payments within seconds.<\/li>\n<li>UPI is one of the only payment system that allows you or online merchants to request money by sending a message, requesting payment via the bank, a facility that is not available in old systems like <a href=\"https:\/\/razorpay.com\/blog\/difference-between-imps-vs-neft\/\">NEFT and IMPS<\/a>.<\/li>\n<li>NPCI does not levy any extra charge for making payments or requesting money via UPI. Thus, UPI payments by individuals for peer-to-peer transactions are completely free.<\/li>\n<li>With no lower limit on the amount of money that can be transferred, UPI has made it easier for brick and mortar stores to accept small payments.<\/li>\n<li>UPI AutoPay function by NPCI for recurring payments provides you the ease of duly paying your utility bills.<\/li>\n<\/ul>\n<h2 id=\"mntl-sc-block_1-0-5\" class=\"comp mntl-sc-block finance-sc-block-heading mntl-sc-block-heading\"><span class=\"ez-toc-section\" id=\"How_Unified_Payments_Interface_UPI_Payment_Works_in_India\"><\/span>How Unified Payments Interface (UPI) Payment Works in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">UPI operates on a simple yet effective framework that streamlines digital transactions. Here\u2019s how it works:<\/span><\/p>\n<h3><b>Step 1. User Registration<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To use UPI, users first download a UPI-enabled app, such as PhonePe, Google Pay, or Paytm. After installation, they register by linking their bank account and creating a unique virtual payment address (VPA), such as user@bankname, which serves as their <\/span><a href=\"https:\/\/razorpay.com\/learn\/what-is-upi-id\/\"><span style=\"font-weight: 400;\">UPI ID<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>Step 2. Initiating a Transaction<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">When a user wants to make a payment, they can do so by selecting the payee&#8217;s VPA (e.g., merchant@bankname), scanning a QR code, or entering their UPI ID. For instance, if a customer wants to pay a local merchant, they can simply scan the merchant&#8217;s QR code or enter the merchant&#8217;s VPA.<\/span><\/p>\n<h3><b>Step 3. Authentication<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To authorize the transaction, users must enter their <a href=\"https:\/\/razorpay.com\/learn\/what-is-a-upi-pin\/\">UPI PIN<\/a>\u2014a secure six-digit code created during registration. This step ensures that only the account holder can approve transactions.<\/span><\/p>\n<h3><b>Step 4. Transaction Processing<\/b><span style=\"font-weight: 400;\">:\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Once the UPI PIN is entered, the app sends the payment request to the UPI server. The server verifies the request and processes it by communicating with the user\u2019s bank (the issuer) and the recipient\u2019s bank (the acquirer).<\/span><\/p>\n<h3><b>Step 5. Confirmation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">After the banks confirm the transaction, the user receives an instant notification regarding the success or failure of the payment. For example, the app might display a message like &#8220;Payment of \u20b9500 to merchant@bankname successful.&#8221;<\/span><\/p>\n<h3><b>Step 6. Settlement<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The UPI system ensures the funds are settled between banks within a short time frame, usually within a few hours, although users see the transaction reflected in their accounts immediately.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This seamless process, facilitated by apps like PhonePe, Google Pay, and Paytm, makes UPI an efficient, secure, and convenient method for digital transactions, contributing to its widespread adoption in India.<\/span><\/p>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/blog\/irdai-bima-asba-new-upi-based-payment-system-for-insurance-premiums\/\">Bima ASBA by IRDAI: A Game-Changer for UPI Insurance Payments<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"UPI_Transaction_Flow\"><\/span><b>UPI Transaction Flow<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The UPI transaction flow outlines the steps involved in processing payments, whether initiated by the sender (push) or requested by the recipient (pull). Understanding this flow helps clarify how seamless and secure transactions occur within the UPI ecosystem.<\/span><\/p>\n<h3><b>PUSH: Streamlined Payment Initiation and Authorisation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Push transactions in UPI allow users to initiate payments directly from their accounts to transfer funds to a recipient. This method is commonly used for purchases, bill payments, or sending money to friends and family.<\/span><\/p>\n<h4><strong>Phase 1: Transaction Initiation and Authorisation<\/strong><\/h4>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Initiating the Transaction<\/b><span style=\"font-weight: 400;\">: Customers use their UPI-enabled apps to enter recipient details, the transaction amount, and any optional notes.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Routing the Request<\/b><span style=\"font-weight: 400;\">: The customer\u2019s app forwards the transaction request to their chosen <a href=\"https:\/\/razorpay.com\/blog\/what-is-a-payment-service-provider\/\">Payment Service Provider<\/a> (PSP), which acts as an intermediary.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Verification by NPCI<\/b><span style=\"font-weight: 400;\">: The PSP routes the request to the National Payments Corporation of India (NPCI), overseeing UPI transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Bank Verification<\/b><span style=\"font-weight: 400;\">: The issuing bank (the sender\u2019s bank) verifies the transaction&#8217;s authenticity, checks account balance, and confirms customer credentials.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Authorisation<\/b><span style=\"font-weight: 400;\">: Upon verification, the issuing bank authorizes the transaction and generates a digital signature for security.<\/span><\/li>\n<\/ol>\n<h4><strong>Phase 2: Verification and Fund Transfer<\/strong><\/h4>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Detail Sharing<\/b><span style=\"font-weight: 400;\">: The PSP shares the sender\u2019s bank details with the UPI system for verification and routing.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Funds Deduction<\/b><span style=\"font-weight: 400;\">: The NPCI checks account details and fund availability. If sufficient funds are available, the NPCI triggers the deduction from the sender&#8217;s account.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Credit to Recipient<\/b><span style=\"font-weight: 400;\">: The acquiring bank (receiver&#8217;s bank) receives the transaction amount and credits it to the payee\u2019s account.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b style=\"font-size: 19px;\">Transaction Confirmation<\/b><span style=\"font-weight: 400;\">: The UPI server sends a response to the customer\u2019s app, confirming the successful transaction and providing a reference ID.<\/span><\/li>\n<\/ol>\n<p><span style=\"font-weight: 400;\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5463 size-full\" src=\"https:\/\/razorpay.com\/blog-content\/uploads\/2021\/01\/upi-intent-payment.png\" alt=\"UPI payment flow chart of intent payment\" width=\"512\" height=\"266\" srcset=\"https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/upi-intent-payment.png 512w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/upi-intent-payment-300x156.png 300w\" sizes=\"auto, (max-width: 512px) 100vw, 512px\" \/><\/span><\/p>\n<h3><b>PULL: Controlled Payment Requests and Execution<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Pull transactions occur when the recipient initiates a request for funds from the sender. This method is often used for bill payments or collecting payments from customers, ensuring secure fund retrieval.<\/span><\/p>\n<h4><strong>Phase 1: Transaction Initiation and Payment Message Flow<\/strong><\/h4>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Recipient Initiation<\/b><span style=\"font-weight: 400;\">: The recipient generates a <a href=\"https:\/\/razorpay.com\/blog\/what-is-a-payment-request\/\">payment request<\/a> through their UPI-enabled app.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payment Request Flow<\/b><span style=\"font-weight: 400;\">: The request is sent to the NPCI, indicating the intention to pull funds from the payer.<\/span><\/li>\n<\/ol>\n<h4><strong>Phase 2: Transaction Flow between Banks<\/strong><\/h4>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Routing the Request<\/b><span style=\"font-weight: 400;\">: The payment request reaches the creditor\u2019s bank, which forwards it to the debtor\u2019s bank via the NPCI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Verification by Debtor\u2019s Bank<\/b><span style=\"font-weight: 400;\">: The debtor&#8217;s bank verifies the request, checks the customer&#8217;s account details, and available balance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Transaction Approval<\/b><span style=\"font-weight: 400;\">: If funds are sufficient, the debtor&#8217;s bank approves the transaction and confirms it with the NPCI.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Completing the Transaction<\/b><span style=\"font-weight: 400;\">: The debtor\u2019s bank transfers the requested amount to the creditor\u2019s bank, completing the transaction.<\/span><\/li>\n<\/ol>\n<h2><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5464 size-full\" src=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/blog-content\/uploads\/2021\/01\/unnamed.png\" alt=\"flow chart of collect UPI\" width=\"512\" height=\"240\" srcset=\"https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/unnamed.png 512w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/unnamed-300x141.png 300w\" sizes=\"auto, (max-width: 512px) 100vw, 512px\" \/><\/h2>\n<h2><span class=\"ez-toc-section\" id=\"Participants_in_UPI\"><\/span><b>Participants in UPI<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To understand how UPI transactions work, it\u2019s essential to recognize the key participants involved:<\/span><\/p>\n<h3><b>1. Payer App\/Payment Service Provider (PSP)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The journey begins with the payer app, such as Google Pay, PhonePe, or Paytm. Users initiate transactions by entering the recipient&#8217;s details and transaction amount.<\/span><\/p>\n<h4><strong>List of major UPI apps and their respective sponsor banks:<\/strong><\/h4>\n<table>\n<tbody>\n<tr>\n<td><b>UPI App\/PSPs<\/b><\/td>\n<td><b>Sponsor Banks<\/b><\/td>\n<td><b>Handles<\/b><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"4\"><span style=\"font-weight: 400;\">Google Pay<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Axis<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@okaxis<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">ICICI<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@okicici<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">HDFC<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@okhdfcbank<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">SBI<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@oksbi<\/span><\/td>\n<\/tr>\n<tr>\n<td rowspan=\"3\"><span style=\"font-weight: 400;\">Phonepe<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Yes<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@ybl<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">ICICI<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@ibl<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Axis<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@axl<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Amazon Pay<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Axis<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@apl<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">WhatsApp Payments<\/span><\/td>\n<td><span style=\"font-weight: 400;\">ICICI Bank<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@okicici<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Airtel Payments Bank<\/span><\/td>\n<td><span style=\"font-weight: 400;\">Kotak Mahindra Bank<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@Kotak<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Paytm<\/span><\/td>\n<td><span style=\"font-weight: 400;\">ICICI Bank<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@okicici<\/span><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">BHIM (Bharat Interface for Money)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">National Payments Corporation of India (NPCI)<\/span><\/td>\n<td><span style=\"font-weight: 400;\">@upi<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/how-to-change-upi-id-in-google-pay\/\"><em><strong>How to Change UPI ID in Google Pay?<\/strong><\/em><\/a><\/p>\n<h3><b>2. National Payments Corporation of India (NPCI)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The NPCI governs UPI, ensuring uniformity and security across transactions. It validates the transaction details and routes requests between banks and PSPs.<\/span><\/p>\n<h3><b>3. Issuing Bank<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The sender&#8217;s bank verifies the transaction request, checking the sender\u2019s credentials and account balance. It authorizes the transaction before proceeding.<\/span><\/p>\n<h3><b>4. Acquiring Bank<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The receiver&#8217;s bank processes the transaction and credits the payee&#8217;s account with the funds once the transaction is confirmed.<\/span><\/p>\n<h3><b>5. Payee PSP<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The payee\u2019s app receives confirmation of the funds and notifies the payee, ensuring transparency and swift reconciliation.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"UPI_Security_and_Data_Protection_Measures\"><\/span><b>UPI Security and Data Protection Measures<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><b>Interbank Transfers<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">When a user initiates an <a href=\"https:\/\/razorpay.com\/\">online payment<\/a> or fund transfer through a UPI-enabled application, the transaction is processed in real-time, ensuring that the funds are instantly debited from the sender&#8217;s account and credited to the recipient&#8217;s account.<\/span><\/p>\n<h3><b>Two-factor authentication (2FA)<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI incorporates a robust Two-Factor Authentication (2FA) mechanism to ensure the security of transactions. Users are required to enter their unique <a href=\"https:\/\/razorpay.com\/learn\/generate-upi-mpin-pin\/\">Mobile Personal Identification Number (MPIN)<\/a> to validate the transaction. Additionally, UPI leverages biometric authentication, utilising features like fingerprint or iris recognition, further enhancing the security of the payment process by reducing the risk of unauthorised access and fraudulent activities.<\/span><\/p>\n<h3><b>Exemplary Data Protection Measures<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Since its inception in 2016, UPI has employed advanced encryption protocols to safeguard sensitive information, ensuring that data remains confidential and uncompromised during transmission.<\/span><\/p>\n<h3><b>Leveraging Existing Payment Systems<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI relies on the existing <a href=\"https:\/\/razorpay.com\/learn\/neft\/\">National Electronic Funds Transfer<\/a> (NEFT), <a href=\"https:\/\/razorpay.com\/learn\/rtgs\/\">Real-Time Gross Settlement<\/a> (RTGS), and Immediate Payment Service (IMPS) systems for settlements. These established <a href=\"https:\/\/razorpay.com\/learn\/digital-payments-india-definition-methods-importance\/\">digital payment systems<\/a> serve as the backbone for UPI, facilitating the seamless transfer of funds between banks and ensuring secure and timely transactions.<\/span><\/p>\n<p><strong>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/neft-vs-upi\/\">NEFT vs UPI: What\u2019s the Difference?<\/a><\/strong><\/p>\n<h3><b>Versatility with Over-the-Counter and Barcode Payments<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI&#8217;s versatility extends beyond peer-to-peer transfers. It can be used for over-the-counter (OTC) payments, allowing users to make quick transactions at physical stores by scanning QR codes or entering Virtual Payment Address (VPA). Additionally, UPI simplifies day-to-day bill payments such as utilities and mobile recharges, offering a one-stop solution for a wide range of financial transactions.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"UPI_Transaction_Limit_and_Charges_in_India\"><\/span>UPI Transaction Limit and Charges in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 data-start=\"142\" data-end=\"184\">UPI Transaction Limits (more detailed)<\/h3>\n<p data-start=\"186\" data-end=\"677\"><strong data-start=\"186\" data-end=\"218\">Standard limits (most users)<\/strong><br \/>\n\u2022 Per transaction: Commonly up to \u20b91 lakh per transfer (your bank\/app may set a lower cap).<br data-start=\"318\" data-end=\"321\" \/>\u2022 Per day: Many banks\/apps allow up to \u20b91 lakh per day for regular transfers, and some also cap usage at around 20 transactions per day.<br data-start=\"469\" data-end=\"472\" \/>\u2022 Why limits differ: Your exact limit can change based on your bank, account type, UPI app, risk checks, and whether you\u2019re a new user (newly linked accounts sometimes have tighter caps initially).<\/p>\n<p data-start=\"679\" data-end=\"893\"><strong data-start=\"679\" data-end=\"718\">Higher limits for specific payments<\/strong><br \/>\n\u2022 Certain categories like healthcare and education can allow higher per-transaction limits (up to \u20b95 lakh) where supported by the merchant category and your bank\/app.<\/p>\n<p data-start=\"895\" data-end=\"1287\"><strong data-start=\"895\" data-end=\"932\">Special UPI modes (separate caps)<\/strong><br \/>\n\u2022 UPI 123PAY (feature phone UPI): Usually has a lower per-transaction limit compared to standard UPI.<br data-start=\"1042\" data-end=\"1045\" \/>\u2022 UPI AutoPay (recurring payments): Limits depend on the mandate type and your bank\/app settings. Many recurring use cases are designed for small-to-mid value payments, but some mandates can go higher depending on rules and approvals.<\/p>\n<h3 data-start=\"1294\" data-end=\"1345\">Charges (what users and merchants actually pay)<\/h3>\n<p data-start=\"1347\" data-end=\"1530\">For users<br \/>\n\u2022 UPI is generally free for customers for bank-to-bank transfers and most merchant payments.<br data-start=\"1457\" data-end=\"1460\" \/>\u2022 In most cases, you won\u2019t see any extra \u201cUPI fee\u201d added while paying.<\/p>\n<p data-start=\"1532\" data-end=\"1915\">For merchants and certain wallet flows<br \/>\n\u2022 Some wallet-based UPI merchant payments can involve interchange charges in the backend (these are typically not charged directly to customers).<br data-start=\"1728\" data-end=\"1731\" \/>\u2022 Banks or providers may apply small service fees for specific cases like certain business services, value-added features, or special payment products, depending on their policies.<\/p>\n<p><b style=\"color: #111111; font-family: Roboto, Arial, sans-serif; font-size: 1.6315em;\">Problems UPI solves and eliminates<\/b><\/p>\n<p><span style=\"font-weight: 400;\">UPI effectively addresses several issues that were prevalent in the pre-digital payment era, such as:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">It eliminates the need for carrying physical cash, reducing the risk of theft or loss.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It minimises the hassles associated with writing and depositing <a href=\"https:\/\/razorpay.com\/learn\/what-is-cheque\/\">cheques<\/a>.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">It does away with the time-consuming process of visiting banks or <a href=\"https:\/\/razorpay.com\/learn\/what-is-atm\/\">ATMs<\/a> for transactions.<\/span><\/li>\n<\/ul>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/learn\/upi-atm-cash-withdrawal\/\">UPI ATM Cash Withdrawal: How to Withdraw Money Using UPI ATM?<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_Start_Using_Unified_Payments_Interface_UPI_Payments_in_India\"><\/span>How to Start Using Unified Payments Interface (UPI) Payments in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">To ensure seamless digital transactions using UPI, a few fundamental prerequisites need to be in place:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Ensure you have a smartphone with a reliable operating system that can support UPI-enabled applications.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">You must have an active bank account with a bank that offers UPI services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Make sure your mobile number is linked to your bank account for verification purposes.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A stable internet connection is essential to use UPI services effectively.<\/span><\/li>\n<\/ul>\n<h3><b>Step 1: Choose a UPI-Enabled App<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Select a UPI-enabled application from your smartphone&#8217;s app store. Popular choices include apps provided by your bank or third-party payment platforms.<\/span><\/p>\n<h3><b>Step 2: Registration and Verification<\/b><\/h3>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Download and install the chosen UPI app.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Open the app and select the option to register.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Enter your mobile number linked to your bank account. The app will send an OTP for verification.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After verifying the OTP, you&#8217;ll need to set a 4-6 digit UPI PIN. This PIN will be required for every transaction to ensure security.<\/span><\/li>\n<\/ol>\n<h3><b>Step 3: Create a <\/b><strong>Virtual Payment Address (VPA)<\/strong><\/h3>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Within the app, navigate to the UPI settings or profile section.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Look for the option to create a new Virtual Payment Address (VPA). You can typically customise your VPA with a username that&#8217;s easy to remember (e.g., yourname@bankname).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Link the desired bank account to this VPA. You can link multiple bank accounts if needed.<\/span><\/li>\n<\/ol>\n<h3><b>Step 4: Initiate UPI Transactions<\/b><\/h3>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To send money, select the option to send funds and enter the recipient&#8217;s VPA or mobile number. Verify the recipient&#8217;s details.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Enter the amount you wish to send and add an optional note if required.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Confirm the transaction using your UPI PIN.<\/span><\/li>\n<\/ol>\n<h3><b>Step 5: Receiving UPI Payments<\/b><\/h3>\n<ol>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">To receive money, simply provide your VPA to the sender.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Once the sender initiates the transaction, you&#8217;ll receive a notification.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The funds will be instantly credited to your linked bank account.<\/span><\/li>\n<\/ol>\n<h3><b>Step 6: Additional UPI Services<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Apart from basic transfers, UPI offers various services like bill payments, recharges, and more. Explore the app to make the most of these functionalities.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits_of_UPI_for_Merchants\"><\/span><strong>Benefits of UPI for Merchants<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Faster Settlements<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">One of the standout benefits of UPI for merchants is the speed at which settlements occur. Unlike traditional payment methods that might involve waiting, UPI ensures swift transfers, often within seconds. This rapid settlement mechanism aids in maintaining healthy cash flow, enabling merchants to have access to funds promptly.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Enhanced Security<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In the digital age, security is paramount, and UPI rises to the occasion. With its multi-layered security protocols, including 2FA and biometric verification, UPI ensures that every transaction is safeguarded against unauthorised access.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Improved Customer Satisfaction<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI not only benefits merchants directly but also enhances the overall customer experience. Customers appreciate the convenience and speed that UPI offers, leading to increased satisfaction and the likelihood of repeat business.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Ease of Integration<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">For developers and tech-savvy merchants, UPI offers a streamlined <a href=\"https:\/\/razorpay.com\/docs\/payments\/payment-methods\/upi\/\">integration process<\/a>. Many payment gateways and platforms provide APIs that enable easy integration of UPI services into online stores and applications.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Access to Digital Transactions<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">As digital payments gain prominence, offering UPI as a payment option ensures that merchants stay relevant and accessible to a wider customer base. Embracing UPI opens doors to tap into the tech-savvy consumer segment, capturing opportunities that might be missed with traditional payment methods.<\/span><\/li>\n<li>\n<h3><b>Reduced Transaction Costs<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI transactions typically have lower fees compared to traditional payment methods or card-based payments. This reduction in <a href=\"https:\/\/razorpay.com\/learn\/what-are-transaction-costs\/\">transaction costs<\/a> makes it a cost-effective choice for receiving payments, boosting the overall financial health of merchants.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">More than 50% of transactions on Razorpay are through the <a href=\"https:\/\/razorpay.com\/upi\/\">UPI payment<\/a> method and it has become somewhat of a default payment mode for most of the people in India. The UPI is perhaps the fastest product to hit 2 billion transactions-a-month in 2020 since its inception in August 2016.<\/span><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-5462 size-full\" src=\"https:\/\/d6xcmfyh68wv8.cloudfront.net\/blog-content\/uploads\/2021\/01\/UPI-usage.png\" alt=\"UPI Transaction year-on-year growth\" width=\"659\" height=\"330\" srcset=\"https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/UPI-usage.png 659w, https:\/\/blog.razorpay.in\/wp-content\/uploads\/2021\/01\/UPI-usage-300x150.png 300w\" sizes=\"auto, (max-width: 659px) 100vw, 659px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Benefits_of_UPI_for_Customers\"><\/span><b>Benefits of UPI for Customers<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Have a look at the following benefits of UPI that can enable you to provide superior services and experiences to your customers.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Ease of Use<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">One of the standout advantages of UPI for customers is its user-friendly interface. UPI eliminates the need for intricate bank account details during transactions. With a VPA, customers can link their bank accounts and make payments using a simple identifier, often their email-like username.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Security Reinforced<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Customers prioritise security when engaging in digital transactions, and <\/span><b>UPI system design caters<\/b><span style=\"font-weight: 400;\"> to this need effectively. The incorporation of 2FA and biometric verification adds an extra layer of security to transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Accessibility Redefined<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI has redefined financial accessibility by bridging gaps between traditional banking and technology. Customers, irrespective of their geographical location, can access UPI-enabled services with a smartphone and an internet connection.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Payment Versatility<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The adaptability of UPI to various payment scenarios is a major boon for customers. Whether it&#8217;s splitting bills with friends, paying for utilities, shopping online, or making in-store purchases through QR codes, UPI caters to a wide spectrum of payment needs.<\/span><\/li>\n<li aria-level=\"1\">\n<h3><b>Simplified Record-Keeping<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Customers often find it challenging to keep track of their expenses. UPI addresses this concern by providing users with a transaction history that captures every payment made through the platform.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Are_Unified_Payments_Interface_UPI_Transactions_Safe\"><\/span>Are Unified Payments Interface (UPI) Transactions Safe?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">UPI transactions are backed by robust safety protocols and stringent regulatory measures established by the RBI, making it a safe choice for business owners, merchants, and customers.<\/span><\/p>\n<p><em><strong>\u00a0Related Read: <a href=\"https:\/\/razorpay.com\/learn\/is-upi-safe-for-online-payment\/\">Is UPI Safe for Online Payment?<\/a><\/strong><\/em><\/p>\n<ul>\n<li>\n<h3><b>Multi-Layered Encryption<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI transactions are protected by advanced encryption protocols such as <\/span><span style=\"font-weight: 400;\">TLS (Transport Layer Security)<\/span><span style=\"font-weight: 400;\">, <\/span><span style=\"font-weight: 400;\">AES (Advanced Encryption Standard), and PKI (Public Key Infrastructure),<\/span> <span style=\"font-weight: 400;\">ensuring that sensitive information including user credentials and transaction data remains confidential during transmission.<\/span><\/li>\n<li>\n<h3><b>Virtual Payment Address<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> The VPA acts as a unique identifier for UPI transactions, eliminating the need to share sensitive bank account details. This reduces the risk of information exposure and unauthorised access to the user&#8217;s bank account.<\/span><\/li>\n<li>\n<h3><b>Device Binding<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI-enabled applications are often bound to specific devices. This measure prevents unauthorised access to a user&#8217;s UPI account from different devices, adding an extra layer of security.<\/span><\/li>\n<li>\n<h3><b>Transaction Limits<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI transactions often have predefined transaction limits set by the user&#8217;s bank. These limits restrict the amount that can be transacted in a single transaction or within a specified timeframe, minimising the impact of potential fraudulent activities.<\/span><\/li>\n<li>\n<h3><b>Regulatory Measures by RBI<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The RBI mandates strong authentication methods for UPI transactions, such as 2FA and biometric verification. It has also established a dispute resolution framework that empowers customers to raise complaints and seek resolution for unauthorised transactions or discrepancies. Additionally, RBI encourages banks and payment service providers to educate customers about safe UPI practices<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"How_is_UPI_Different_from_IMPS\"><\/span><b>How is UPI Different from IMPS?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">UPI (Unified Payments Interface) and <a href=\"https:\/\/razorpay.com\/learn\/what-is-imps\/\">IMPS (Immediate Payment Service)<\/a> both facilitate instant money transfers but differ in functionality and user experience:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>UPI:<\/b><span style=\"font-weight: 400;\"> Provides a user-friendly interface, enabling transactions through mobile apps using QR codes and Virtual Payment Addresses (VPAs). It supports higher transaction limits and employs two-factor authentication for enhanced security.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b style=\"font-size: 19px;\">IMPS:<\/b><span style=\"font-weight: 400;\"> Requires detailed bank information, including the recipient&#8217;s <a href=\"https:\/\/razorpay.com\/learn\/bank-account-number\/\">bank account number<\/a> and <a href=\"https:\/\/razorpay.com\/blog\/decoding-ifsc-codes-meaning-importance\/\">IFSC code<\/a> for each transaction. While it also facilitates instant interbank transfers, IMPS typically has lower transaction limits compared to UPI.<\/span><\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Why_is_Razorpay_the_Preferred_Payment_Gateway_for_UPI_Payments\"><\/span><b>Why is Razorpay the Preferred Payment Gateway for UPI Payments?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><b>First Payment Aggregator to Launch UPI Payments in 2016<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Razorpay made history by becoming the first <a href=\"https:\/\/razorpay.com\/blog\/what-is-a-payment-aggregator\/\">payment aggregator<\/a> to introduce UPI payments through its platform in 2016. We were also the first payment aggregator to launch <a href=\"https:\/\/razorpay.com\/upi-autopay\/\">UPI AutoPay<\/a> and <a href=\"https:\/\/razorpay.com\/blog\/upi-upgrade-affect-indian-business\/\">UPI 2.0 features<\/a>. Our close partnership with NPCI gives us an extra edge to stay one step ahead of our competitors. Interestingly, Razorpay is also the market leader in P2M (person to merchant) UPI payments in India.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\"><strong>Multi bank model approach<\/strong>\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Razorpay closely works with multiple banks and payment technology service providers to solve the exact customer requirement. In the case of UPI payments, we work with 6 different banks and route transactions based on our Smart Routing solution. This helps businesses to keep getting best in class success rate, even if there is downtime on one bank or the other.\u00a0<\/span><\/p>\n<h3><b>Reconciliation and Refunds<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Razorpay&#8217;s commitment to customer satisfaction is further underscored by its efficient reconciliation and refund processes. Reconciliation, a critical aspect of financial operations, is streamlined through Razorpay&#8217;s advanced technology, minimising discrepancies and simplifying accounting processes for businesses.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/dashboard.razorpay.com\/signin\">Razorpay Dashboard<\/a> provides different types of reports to help you with reconciliations. Thus, even if we are using multiple banking partners to process your online payments, you don&#8217;t have to worry much about the reconciliation. The best in class Reconciliation system, along with our \u2018Instant Refund\u2019 product makes Razorpay the preferred UPI payment partner in India.\u00a0<\/span><\/p>\n<h3><b>Developer-Friendly APIs<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In the rapidly evolving world of UPI transactions, developer-friendly APIs play a pivotal role, and Razorpay excels in this arena. Razorpay&#8217;s well-documented and intuitive APIs reduce the complexities associated with UPI integration. This approach encourages innovation, allowing developers to create innovative solutions that enhance the UPI ecosystem.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_is_UPI_20\"><\/span><b>What is UPI 2.0?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">UPI 2.0 represents the latest iteration of this revolutionary payment system, bringing with it a host of enhancements and new features. Understanding UPI 2.0 is crucial as it opens up new possibilities and capabilities within the realm of digital transactions. UPI 2.0 builds upon the foundation laid by its predecessor, UPI 1.0, to further simplify and enrich the digital payment experience.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Features_of_UPI_20\"><\/span><b>Features of UPI 2.0<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Overdraft Facility<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 introduces an overdraft facility, allowing users to link their overdraft accounts to their UPI handles. This empowers users to perform transactions even when their account balance is insufficient, ensuring uninterrupted services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>One-Time Mandate<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 enables users to create one-time mandates for pre-authorised transactions. This feature is particularly beneficial for businesses that offer subscription-based services or have recurring payment requirements, providing a hassle-free way to initiate transactions without repetitive authorisation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Sending invoices on the go<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> Businesses can now send <a href=\"https:\/\/razorpay.com\/blog\/what-is-invoice\/\">invoices<\/a> along with payment requests through UPI 2.0. This feature streamlines the payment process for customers, as they receive detailed invoices directly in their UPI apps, simplifying payment validation and reconciliation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Signed Intent and QR<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 enhances security by introducing signed QR codes. These QR codes carry digitally signed information, ensuring the authenticity of the merchant and preventing potential QR code tampering.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Linking of Multiple Accounts<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 allows users to link multiple bank accounts to a single UPI handle. This feature offers added flexibility and convenience, enabling users to choose from different accounts when making transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Biometric Authentication<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 incorporates biometric authentication, leveraging fingerprint and iris scans for secure <a href=\"https:\/\/razorpay.com\/learn\/what-is-authorized-transaction\/\">transaction authorisation<\/a>. This advanced authentication method adds an extra layer of security to UPI transactions.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Enhanced Transaction Limits<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 raises transaction limits for certain types of payments, such as peer-to-peer and peer-to-merchant transactions. This facilitates larger transactions, catering to businesses and individuals with higher payment requirements.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><b>Bill Sharing<\/b><\/h3>\n<p><span style=\"font-weight: 400;\"> UPI 2.0 introduces bill-sharing options, enabling users to split bills and expenses seamlessly. This feature simplifies group payments, making it easier to settle shared expenses among friends, family, or colleagues.<br \/>\n<\/span><\/li>\n<\/ul>\n<p><em><strong>Related Read: <a href=\"https:\/\/razorpay.com\/blog\/digital-rupee-vs-upi\/\">Digital Rupee vs UPI: Understanding the Key Differences<\/a><\/strong><\/em><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span><b>Key Takeaways<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">UPI stands as a transformative force in the world of digital transactions. Its ingenious design, seamless integration, and user-friendly features have reshaped financial transactions. UPI&#8217;s real-time capabilities, robust security measures, and interoperability have not only simplified transactions but have also accelerated the adoption of digital payments.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">As UPI continues to evolve with enhancements like UPI 2.0, its significance in modernising financial interactions and promoting a cashless economy remains indisputable. It has ushered in a digitally empowered financial world with a strong focus on inclusivity. Significantly, Razorpay has earned a distinct status as the preferred payment gateway for UPI payments.<\/span><\/p>\n<p><strong><em>Related Read: <a href=\"https:\/\/razorpay.com\/blog\/is-mpin-and-upi-pin-same\/\">MPIN vs UPI PIN: What&#8217;s the Difference?<\/a><br \/>\nRelated Read: <a href=\"\u201chttps:\/\/razorpay.com\/learn\/what-is-payment-bank\/\u201d\">What are Payment Banks? Features &amp; List of Payments Banks<\/a><\/em><\/strong><\/p>\n<p style=\"text-align: center;\"><a style=\"background-color: #1a73e8; color: #ffffff; font-weight: 800; padding: 7px 15px; border-radius: 7px; font-size: 16px; text-decoration: none; display: inline-block; white-space: nowrap;\" href=\"https:\/\/razorpay.com\/payment-gateway\/?utm_source=blog&amp;utm_medium=referral&amp;utm_campaign=internationalpayments\">Explore Razorpay&#8217;s Payment Solutions<\/a><\/p>\n<div id=\"faq-1\" class=\"rank-math-list-item\">\n<h2><span class=\"ez-toc-section\" id=\"Frequently_Asked_Questions_FAQs\"><\/span><b>Frequently Asked Questions (FAQs)<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><b>1. What is UPI PIN?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">A UPI PIN is a unique 4 to 6-digit Personal Identification Number that serves as a secure authentication code for UPI transactions. It ensures that only the authorised user can initiate and confirm transactions through their UPI-enabled app, adding an extra layer of security to the process.<\/span><\/p>\n<h3><b>2. How to set my UPI PIN?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Follow these steps to set your UPI PIN:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Open your UPI-enabled app and go to the UPI PIN section.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Enter the last six digits of your debit card and its expiry date.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">You will receive an OTP for verification. Enter the OTP.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Set your desired UPI PIN.<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Confirm the UPI PIN and it will be set for your account.<\/span><\/li>\n<\/ul>\n<h3><b>3. What will happen if I forget my UPI PIN?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">If you forget your UPI PIN, you can reset it using the app&#8217;s &#8220;Forgot UPI PIN&#8221; option. This usually involves verifying your identity through methods like answering security questions or receiving an OTP on your registered mobile number. It&#8217;s important to follow the app&#8217;s instructions for a secure PIN reset process.<\/span><\/p>\n<h3><b>4. Is it possible to pay merchants through UPI?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI allows seamless payments to merchants. You can make payments by scanning the UPI QR code or entering the VPA. This method simplifies transactions for both customers and merchants, fostering efficient and secure digital payments.<\/span><\/p>\n<h3><b>5. How to find your UPI ID?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To find your UPI ID, open your UPI-enabled app and navigate to the profile or settings section. Your UPI ID will typically be displayed along with your linked bank accounts.<\/span><\/p>\n<h3><b>6. What is the difference between BHIM and UPI?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">BHIM (Bharat Interface for Money) is a mobile application developed by NPCI for UPI transactions. UPI is the underlying framework that facilitates real-time money transfers, while BHIM is one of the platforms through which users can access UPI services.<\/span><\/p>\n<h3><b>7. Is KYC required for UPI money transfer?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes, KYC (Know Your Customer) is required to use UPI services. Users must complete KYC by providing identity and address proof to their bank to enable UPI transactions.<\/span><\/p>\n<h3><b>8. How to generate a UPI PIN?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">To generate a UPI PIN, open your UPI-enabled app, select your bank account, and choose the option to set or change your UPI PIN. You will be prompted to enter your debit card details and a new PIN, which must be a 4 to 6-digit number.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\"><strong>9.<\/strong> <\/span><b>What countries accept UPI?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">UPI (Unified Payments Interface) is primarily used in India but has expanded internationally. Here\u2019s a list of countries that accept UPI payments as per <\/span><a href=\"https:\/\/www.npci.org.in\/who-we-are\/group-companies\/npci-international\/list-of-countries\" rel=\"nofollow noopener\" target=\"_blank\"><span style=\"font-weight: 400;\">NPCI<\/span><\/a><span style=\"font-weight: 400;\">: Bhutan, France, Mauritius, Nepal, Singapore, Sri Lanka, and UAE.<\/span><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>UPI, or Unified Payments Interface, is a real-time digital payment system that allows users to send money, pay bills, and manage accounts through one app. This article explains what UPI is, how it works, and its key features, helping you understand its role in simplifying digital payments. What are Instant Payments? Instant payments allow financial<\/p>\n","protected":false},"author":43,"featured_media":16231,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[93,91],"class_list":{"0":"post-5461","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-payments","8":"tag-upi","9":"tag-upi-payments"},"_links":{"self":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/5461","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/users\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/comments?post=5461"}],"version-history":[{"count":35,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/5461\/revisions"}],"predecessor-version":[{"id":25308,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/posts\/5461\/revisions\/25308"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media\/16231"}],"wp:attachment":[{"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/media?parent=5461"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/categories?post=5461"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/razorpay.com\/blog\/wp-json\/wp\/v2\/tags?post=5461"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}