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| February 21, 2023

What is VPA in UPI – Understand the VPA Meaning, Full Form & Benefits

Technological advancement has made our lives simpler, more efficient, and hassle-free. Digitalization has taken over almost every aspect of our everyday actions. From simple things such as groceries, medicines, food, etc. to complex financial transactions- almost everything can be done with the click of a button. One such revolutionary financial advancement is the Unified Payment Interface or UPA. It has greatly reduced the use of cash or even card-driven payments. All you need is a bank account and a smartphone. The ease of using this system has made it massively popular not just among individuals but has also greatly benefitted businesses. No longer waiting in long bank queues to make domestic money transfers or carrying wads of cash for purchases - UPI payments take care of all these and more.

What is a Unified Payment Interface or UPI?

Unified Payments Interface is an instant real-time payment system developed by the National Payments Corporation of India. The interface facilitates inter-bank peer-to-peer and person-to-merchant transactions. It is used on mobile devices to instantly transfer funds between two bank accounts. Put simply, a person with a valid bank account and a smartphone can send and receive domestic money transfers instantly. Unlike other online payment modes such as NEFT, RTGS, and IMPS, there’s no need of visiting a bank branch or logging into the bank’s net banking portal to make a financial transaction. UPI payments are facilitated by creating Virtual Payment Addresses or VPAs, unique to each bank account holder.

What is VPA?

The full form of VPA is ‘Virtual Payment Address’. It is a unique financial address using which you can send and/or receive money in your bank account through UPI. The sender and receiver both will have a unique VPA. The sender or payer virtual address is the one that initiates the payment and the receiver or payee VPA is the one that receives the payment. Each VPA is specifically mapped to the user's bank account and is a unique ID. Think of it as a digital code, specific to your bank account which acts as the source from and to which UPI payments can be made. There could be different VPAs for different bank accounts or digital wallets.

A typical VPA looks something like abc@bankname if you are using a bank’s portal or abc@digitalwallet if you are using a third-party digital wallet.

The ‘abc’ part could be your name, registered mobile number, email ID, etc and ‘bankname’ could be the name of your linked bank. In case you are using a digital wallet, @digitalwallet represents the digital wallet you are using such as Paytm, GPay, PhonePe, etc. Some portals also allow you to create a Virtual Payment address (VPA) of your choice.

How to Create VPA?

Creating a VPA number takes only a couple of minutes.

  • Install a UPI-enabled app on your smartphone. It could be your bank’s app, digital wallet app, or the official UPI portal called BHIM (Bharat Interface for Money).
  • Fill in your bank account details such as account number, IFSC code, branch name, and others.
  • Now you will be asked to choose a VPA or UPI id. You can select the default VPA or create one of your own.
  • After choosing a VPA, link VPA to your bank account.
  • Complete the mobile verification process wherein a One-Time Password (OTP) would be sent to your registered mobile number, linked to your bank account.
  • After the successful mobile verification, a security verification follows for authenticating your identity and bank details.
  • Submit details after verification. Your bank account is now linked to UPI and ready for making UPI-enabled transactions.

How to send money through VPA?

  • Open your UPI application (BHIM app, Bank App, or Digital Wallet App).
  • Enter the pin and go to the "New Payments" option.
  • Now, go to "Transfer Money" and select "UPI ID (VPA), QR code, or the mobile number of the receiver".
  • A pop-up will open, Select UPI ID or VPA.
  • Now enter the person's VPA to verify.
  • If it is correct, enter the amount, type your password and send money.
  • You shall receive a notification whether or not the online payment was successful.

Benefits of VPA

  • Domestic money transfers can be done from anywhere, anytime on a 24-by-7 basis.
  • Secure, simplified, hassle-free online payments.
  • While several banks charge users for using RTGS, IMPS, and NEFT, VPA transactions using the UPI platform are practically free.
  • No need to carry cash or debit/credit cards for purchases. You simply have to scan the merchant’s QR code.
  • Many UPI-enabled apps reward users with discount vouchers, coupons, cash back, and other rewards.
  • No need for passbooks and bank statements to check historical UPI payments.
  • The UPI links all your bank accounts. A single bank UPI app allows you to generate VPA for all of your UPI-enabled bank accounts.

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