How does the UPI payment system work?

UPI is a real-time payment system developed by the National Payments Corporation of India (NPCI) that enables instant fund transfers between bank accounts using a mobile device.

• Registration: Users link their bank account to a UPI-enabled app and create a unique UPI ID (Virtual Payment Address).
• Initiating Payment: Transactions are started by scanning a QR code, entering a mobile number, or a UPI ID.
• Authentication: Every payment requires a secure 4 or 6-digit UPI PIN for authorization.
• Processing: The system uses the Immediate Payment Service (IMPS) infrastructure to move money instantly 24/7.