How does UPI transaction work?

UPI or Unified Payments Interface is an instant payment platform which allows the users to transfer money directly from their bank account to the recipient’s bank account. Apps like BHIM, Google Pay, Paytm, Phonepe, and Amazon Pay, etc. use this platform to enable cashless as well as card-less bank to bank money transfer. This is strictly regulated by the Reserve Bank of India (RBI). 

In order to use Unified Payments Portal (UPI), an individual is required to register himself and create a unique UPI ID/VPA.

To register with UPI follow the steps below:

1. Download and install the UPI enabled Bank's app or 3rd party app from Google Play Store or Apple App Store
2. Select your preferred language, verify your mobile number and select your bank account
3. Create your profile and a unique virtual ID known as Virtual Payment Address (VPA)
4. Link your bank and account number with the virtual ID (VPA)
5. Create your MPIN (this will be your password) to validate and proceed with the transactions
6. Complete registration

To Send Money via UPI follow the steps below:

1. Log in to your UPI enabled mobile application. It can be Goole Pay, Phonepe, BHIM UPI, Paytm, and Amazon Pay, etc.
2. Go to UPI section (E.g. New payment, UPI Money Transfer, Send Money, etc.)
3. Enter the payee’s VPA or scan UPI QR code
4. Enter the amount to be transferred and hit Send
5. Enter your mPIN to authenticate your payment
6. The money should be transferred within seconds

To Receive Money via UPI follow the steps below:

1. Login to your UPI-enabled mobile app
2. Select the option- Transfer Money (in Paytm, it is Money Transfer “To Self Account”)
3. Enter the payer’s VPA and the amount to be credited
4. Submit the request, a notification will be sent to the payer
5. If they accept the request, they will enter their mPIN to authenticate the transaction 
6. When the transaction is complete, both the payer and payee will be notified of debit and credit