How does the UPI system work?

UPI (Unified Payments Interface) is a real-time payment system developed by NPCI that enables instant fund transfers between bank accounts using a mobile device. It works by:

• Linking multiple bank accounts to a single mobile application.
• Using a Virtual Payment Address (VPA) or UPI ID, eliminating the need to share sensitive bank details.
• Processing transactions through the IMPS infrastructure for 24/7 availability.
• Securing payments with a unique UPI PIN for authentication.

This system simplifies digital transactions for peer-to-peer and merchant payments across India.