How does a bank verify merchants during UPI onboarding?

During UPI onboarding, banks verify merchants through steps like checking KYC details, validating business documents, confirming PAN and GST information, and reviewing the business category. They also assess risk levels to ensure the merchant is genuine and safe for UPI transactions. Banks may use automated tools and APIs to complete verification faster. This process helps prevent fake businesses from joining the UPI system and ensures safe transactions for customers.