Virtual Payment Address (VPA) -Making the UPI payment system unique!

. 7 min read
Virtual Payment Address (VPA) -Making the UPI payment system unique!

Imagine, you are at a restaurant with your girlfriend. But lo, you have forgotten your wallet. Don’t despair, UPI is here! Like a hero withdrawing his gun, just whip out your smartphone, open your UPI app, and make the payment. But do you know, what makes this possible? Just read on!

Today, India is showing the world that it is second to none in the adoption of technology and digital payment solutions are an example of it. As per government data, more than 300 crore transactions happened through UPI in July this year, and over rupees 6 lakh crore were transacted.

There is a big increase in usage of QR code-based payment solutions helped by smartphone penetration in every nook and corner of the country. Other factors contributing to its rise are high-speed internet connections and Aadhar linked bank accounts. In a post-pandemic world, UPI transactions are growing at a break-neck speed, facilitating contactless payments.

UPI has given India a head-start in real-time inter-bank payments. VPA plays a big part in the smooth and efficient digital financial transactions based on the UPI system. In this article, we will tell you everything you need to know about what is VPA in UPI and how it works.

What is UPI?

UPI or Unified Payment Interface, is the most preferred digital payment method for transferring money, paying bills, and merchant payments. It was launched by the National Payments Corporation of India (NPCI) in 2016. The payment system is monitored by the Reserve Bank of India (RBI) and is totally safe.

UPI enables a bank account holder to instantly transfer funds across different banks using a smartphone. Presently all major banks in India like HDFC, ICICI, and Yes Bank are a part of UPI; the total number of such live banks as of May 2021 is 224. All UPI-based apps-whether it is Bhim, Paytm, or PhonePe, use the UPI id.

Unified Payment Interface acronym with marker

Benefits of UPI-Freedom from bank details and IFSC codes

UPI is the latest payment technique used for a variety of purposes like online money transfer, making bill payments, or merchant payments. They offer a fast and seamless experience to customers. The chief benefit of UPI payments is that you don’t have to pay additional transaction charges.

With UPI funds can be transferred or received by the user’s bank account, without having to give either a bank account number or an Indian Financial System Code (IFSC) -VPA is usually the only piece of information that is required. So, the bank details of the paying party are not revealed to the payee. The only criteria are that the bank must be UPI- enabled. With a VPA id one can transfer money 24x7, and during holidays also.

UPI has become the leading form of digital payment in India, mainly because it does not have a minimum transfer limit.

How to register for UPI?

  • Download the UPI app on your smartphone from Google Play Store.
  • Verify the registered mobile number via SMS. This should be the same number registered with your bank.
  • The app will automatically verify the mobile number after the SMS is received.
  • Enter your name, email address, and a ‘virtual address.
  • Choose your bank account and accept all terms and conditions.
  • Set a strong password.

Now you are good to go!

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UPI Autopay method

Businesses are adding UPI autopay to their existing recurrent payment options like debit or credit cards to give more flexibility to customers. This facility that has been added to UPI 2.0, gives customers the mandate for recurrent payment for services like online movie streaming, electricity or bills, and much more. In the UPI autopay method, the users are asked about their UPI or Paytm ID.

The major players who are opting for UPI payment options are hotels and restaurants, retail shop owners, and online sellers like Amazon. UPI offers customers the option to create any number of VPAs for making and receiving payments.

What is vpa in UPI?

If you are one of the millions in India using the UPI to send or receive money, then you must be familiar with the Virtual Payment Address or VPA. VPA is also popularly known as the UPI id. It is something like an email id independent of your bank account and is required for all financial transactions within the UPI. For example, VPA in UPI payment can be something like It is often simpler than your email address.

‘xyz’ is a prefix that can be your name or mobile number. A VPA like example@hdfc can be linked to an ICICI bank account, and vice-versa.

This unique virtual id is generated by a UPI application like Google Pay, Paytm or PhonePe, and is mapped to the user’s bank account. VPA enables the UPI to be present in the form of a mobile-friendly app, and be a more convenient form of money transfer than the conventional NEFT or IMPS.

VPA acts as an identifier that helps UPI to track your account. If you are a bank account holder who is also a UPI user, you need to link your account with the VPA address. The VPA will replace your bank account details-so you need not give your bank account details for making multiple payments.

How to create VPA?

To start using UPI, you must first have a valid user name which is nothing but the VPA.

  • First download a UPI app such as Bhim, Google Pay, or Paytm, and fill in your bank account details such as account number, branch name, and IFSC code. You can also download any other bank’s UPI app, other than your own bank. The only criteria are that the bank should be UPI enabled.
  • Choose a VPA. Generally, a primary default VPA will be set up by the UPA app that you are using. However, if you create one, you have to check for its availability.
  • This VPA will act as your financial address. Link it to your bank account by generating and using an MPIN.
  • You will have to go through a mobile verification process using an authentication technique or a security question.

How to use VPA for financial transactions?

The VPA is the key to the Bhim UPI fund transfer system. After your bank account has been linked to the VPA, you can make payments using the “Pay with VPA” option. To pay someone you have to put the beneficiary’s account details and VPA.

Does Google Pay also involve VPAs?

Many popular UPI payment applications like Google Pay, carry out transactions with the help of VPAs. The Google Pay app provides multiple payment options, and users can transact through their mobile numbers or VPAs. You can find your VPA by opening the Google Pay application and clicking on the bank account option.

Unified Payment Interface acronym on blue background


The Reserve Bank of India (RBI) in a notification on August 27, 2021, has said that Prepaid Payment Instruments (PPI)s like Paytm, PhonePe and Freecharge will have to enable interoperability of digital wallet balances. This has to be done through the UPI. These PPIs already have UPI licenses.

To enjoy interoperability, the user has to fulfill all the Know Your Customer (KYC) requirements. It will be mandatory for both receiving and sending money by 31st March 2022.


India’s new cashless digital payment system, e-RUPI, has been developed by the National Payments Corporation of India (NPCI) on its UPI platform, along with the Department of Financial Services (DFS). This was launched by our honorable Prime Minister to allow cashless payments for the Covid-19 vaccination. This is a seamless one-time payment mechanism that will enable a user to redeem a voucher at Merchants accepting UPI pre-paid vouchers, without needing a debit or a credit card.

The UPI service is making financial transactions, especially in eCommerce, easier, and also facilitating person-to-person micro-payments. It has made significant inroads into consumer mindset and behavior.  We hope that this blog will clear your concepts about the role of VPA in UPI payment-now a very essential part of our everyday lives.

Also Read:

1) Pros and Cons of Cash Payment for Your Business
2) What Is an E-payment System?
3) How do you set up an online payment system for your small-sized business?
4) Differences between E-checks and Paper Checks

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Q. Give some examples of a VPA?

Ans. ‘John@axisbank’, ‘anjali@upi’, and ‘123@rbl’, are some common examples of VPA.

Q. To register for UPI, can I use any password?

Ans. Your password should be strong and have a minimum of six digits.

Q. What is the volume of UPI transactions in India?

Ans. The volume is huge, over 2.5 billion!

Q. Can I receive and send money during bank holidays using VPA?

Ans. Yes, money can be transferred during bank holidays and weekends. That is why UPI payment is a better system than IMPS or cards.

Q. Can I receive money from third parties via VPA?

Ans. Yes, for this you have to enter the VPA of the party from which you want to receive payment.