How does a virtual payment work?

Virtual payments, such as those made with a virtual card number, replace your physical card number for online or in-app transactions to enhance security. A financial institution generates a unique number for the payment amount. The payee processes the transaction through their bank, and once authorized, the transaction settles between the banks. Alternatively, using a Virtual Payment Address (VPA) through UPI, the system validates the VPA and instantly routes the transaction to the recipient's bank account linked to the VPA.