VPA Settlements

Route supports VPA (Virtual Payment Address) as a settlement destination for Linked Accounts. Marketplace platforms can pay beneficiaries using their UPI id instead of requiring bank account details.

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How VPA Settlements Work

1. Create a Linked Account and provide the beneficiary’s VPA instead of bank account details.
2. Route verifies the VPA instantly via API (under 3 seconds) and returns the account holder’s name for you to perform name matching.
3. When a payment is received, Route creates a settlement and generates a payout to the beneficiary’s VPA.

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When to Use VPA Settlements

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Prerequisites

• Your Razorpay Route account must be active.
• VPA Settlements must be enabled for your account. Contact our Support team to get this activated.
• Beneficiaries must have an active UPI id linked to an Indian bank account.
• As a business, you are responsible for performing name matching between the VPA holder name (returned by Route during verification) and the beneficiary name in your records. This is a compliance requirement. Refer to Name Matching Requirements.

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Limits

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Create a VPA Linked Account

To create a VPA-based Linked Account from the Dashboard:

1. Log in to the Dashboard and navigate to Route under PAYMENT PRODUCTS.
2. Click the Accounts tab, then + Add Account.
3. Enter the Account Name, Account Email and Phone Number.
4. Under Account Type, select VPA.
5. Enter the beneficiary’s UPI id in the VPA Address field. For example, landlord@paytm or 9876543210@ybl.
6. Click Verify VPA. Route validates the VPA and returns the account holder’s name from the beneficiary’s bank.
7. Perform name matching between the returned name and your beneficiary records. Refer to Name Matching Requirements.
8. Under Settlement Configuration, select Instant as the settlement schedule and IMPS as the mode.
9. Click Create Linked Account.

The Linked Account is created and activated immediately.

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VPA Verification

When you submit a VPA during Linked Account creation, Route calls the RazorpayX VPA Verification API, which queries the NPCI network and returns the account holder’s name as registered with the beneficiary’s bank. Verification states:

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Name Matching Requirements

As a business, you must verify that the VPA belongs to the beneficiary you are onboarding. Route provides the VPA holder’s name returned by the beneficiary’s bank. You are responsible for comparing this name against your beneficiary records and documenting the outcome. Name matching should account for common bank formatting differences such as uppercase names, surname-first ordering, abbreviated middle names or truncated names.

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Settlement Flow

Route generates a webhook event at each stage. Subscribe to the following events: Refer to Subscribe to Webhooks for setup instructions.

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Handle VPA Settlement Failures

A payout may fail if the beneficiary’s VPA becomes inactive after onboarding. When this happens:

1. Route sends a payout.vpa_failed webhook with the error code vpa_inactive.
2. Notify the beneficiary and ask them to confirm or update their UPI id.
3. Update the Linked Account with the new VPA via the Dashboard or API and re-verify.
4. Retry the settlement from the Dashboard under Route → Settlements → Failed → Retry.

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Daily Limit Handling

If a beneficiary’s VPA reaches the ₹1 lakh daily limit, the transfer is rejected with the error daily_limit_exceeded. The limit resets at midnight IST. Options when the limit is reached:

• Queue the settlement for the next day.
• Switch to bank account settlement for that beneficiary (requires a separate Linked Account with bank details).
• If the beneficiary has multiple UPI ids, each VPA has an independent daily limit.

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Pricing

Standard Route pricing applies. No additional charges are levied for using VPA over bank account settlement.

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Comparison: VPA vs Bank Account Settlement

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FAQs

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Related Information

• Linked Accounts
• Schedule Settlements
• Transfer Funds to Linked Accounts
• Subscribe to Webhooks
• Route APIs