If you have been reading about UPI payments, you must have come across terms like VPA or UPI ID. There are chances that these two terms seem to be confusing. But we will help you understand what they mean and how they are different from each other in this blog. Continue reading to find out!
What is VPA in UPI Payment?
To make UPI payments, one needs to have a valid ID which is also referred to as VPA.
VPA stands for Virtual Payment Address, which is basically the payment address on which users can make UPI money transfers.
When you make online transfers from bank to bank through UPI, it actually becomes possible because the money is sent from one VPA to another. UPI is simply an acronym for Unified Payments Interface, which has made online banking and money transfers easier than ever before. Users can now send or receive money directly from or to a bank account using UPI as the mode of payment. All one needs is a UPI ID to perform the transaction.
Unlike the traditional ways of money transfer, users don’t need to add beneficiaries and await the bank’s approval for as long as 24 hours. In case of urgent requirements, adding account numbers, IFSC codes, and other details can be time-taking. One may also falter in a hurry. UPI, on the other hand, has become a no-fuss mode of payment, enabling money transfers by using a mobile number linked with the receiver’s bank account.
Let’s understand a UPI transaction with the help of an example:
Suppose, you wish to make a UPI payment through Paytm. Now, when you create your UPI account on the Paytm app, Paytm will automatically create your UPI ID or your VPA. You will also have to link a bank account, from and to which you wish to make the transfers while creating a UPI account.
Once your UPI ID or VPA gets created, you can simply share it with your friends and family to send/receive money. For instance, your UPI ID/VPA on the Paytm app may look like – 9xxxxxxxx9@paytm; where 9xxxxxxxx9 refers to your contact number.
VPA in a UPI transaction is a unique ID that is mapped to the user’s UPI account. It is the user’s phone number and the service provider’s name that constitute the unique virtual address for payments.
How is the VPA in UPI Unique?
In most cases, the VPA in UPI is usually your phone number and bank name. In some cases, it can also be a mix of names or dates of birth, but, irrespective of its format, VPA/UPI ID stands unique to every user. Most of the UPI payment apps tie-up with banks to provide UPI services to users and they together serve as Payment Service Providers (PSPs).
On the Paytm app, your phone number is unique and stands as your identification in VPA. It is called Virtual Payment Address because it is your virtual address for sending or receiving payments. It is also known as UPI ID because it is your unique ID for UPI payments.
Your VPA or UPI ID is unique so that there are no faults or incorrect money transfers. Your VPA includes at least one of your personal information so that no two users can have the same virtual payment address.
UPI VPA on Paytm
When you create a UPI account on the Paytm app, you have to link a bank account, to and from which you will perform money transfers. Note that you can link more than one bank account to your UPI account, and you can also switch between your accounts to send and/or receive money.
When you create your UPI account, your UPI ID or VPA automatically gets created. You can locate this virtual payment address from your profile section located on the top left corner of the main screen on your Paytm app.
Benefits of Paytm UPI
The use of UPI VPA is to transfer money online directly between banks. This hassle-free money transfer between banks draws an advantage over ATM transfer, net banking, or other modes of online banking. Following are the benefits of making UPI payments through the Paytm app –
- You can pay money or receive it through UPI for 24×7 hours and 365 days. Unlike various other modes of money transfer, UPI is not dependent on the working hours of the bank
- You can make UPI payments at the ease and comfort of your home. You don’t need to go to a bank or ATM for making money transfers through UPI
- With UPI ID, you don’t need to provide any other details like an account number or IFSC. All you need to share is the receiver’s mobile number to perform the transaction
- There is a minimum chance of fraudulent activity while performing transactions through UPI. You can confirm the mobile number of the person to whom you make the payment. On the Paytm app, you can also text before making a payment on Paytm through UPI for further confirmation
- To confirm the status of your UPI transaction, you can always use the UPI Reference Number if there is an issue. For example, if the money is deducted from your bank and the receiver does not get the money, you can contact the Paytm Payments Bank helpline for the same. Paytm offers 24×7 help to its customers
- UPI Reference Number or UPI ID is a 12-digit number that you get after completing every UPI transaction. You can use this number to resolve your doubts and queries. When you make a Paytm UPI transaction, its status gets displayed instantly on the app screen. You can also track your transaction status in the payment/transaction history section of the Paytm app
Comparing UPI with Other Modes of Online Payment
UPI VPA Payment Vs Bank Account Transfer
UPI is a simpler and easier process of money transfer as compared to online transfers that require the bank account details of the receiver. You don’t need to add account numbers, IFSCs, and other details along with OTPs (One-Time Password). All you need to do is enter the receiver’s mobile number to complete your UPI transaction.
UPI Payment Vs Internet Banking
Internet banking is undoubtedly a complex mode of money transfer when compared to UPI money transfer. Although it can be quick through RTGS, IMPS, or NEFT, you need to have an added beneficiary. If you have not added the beneficiary details, you cannot make quick payments as you can do with UPI. You have to log in to your internet banking account to add a new payee and wait for a few hours before the bank adds the beneficiary/payee. Most banks do not even allow instant online payments. However, if you use UPI, you can instantly make online money transactions to existing beneficiaries or new ones.
UPI Payment Vs ATM Transfer
Although you can make direct transfers to banks using ATM cards, it is less convenient than UPI transfers. You need to visit an ATM for money transfers and sometimes, the nearby ATMs may not be able to read the card’s bar code or have low servers. If payments through UPI VPA fail, you can try later at the comfort of your home or any other place without the need of going to a designated place like an ATM.
Wrapping it up:
VPA full form stands for Virtual Payment Address. VPA means the payment address on which users can make UPI money transfers. When you create your UPI account on the Paytm app, your UPI ID or VPA automatically gets created. So you don’t need to put in any additional effort to find out your UPI VPA. You can locate this virtual payment address from your profile section located on the top left corner of the main screen on your Paytm app.