How does UPI work step by step?

A UPI transaction begins when the sender opens a UPI-enabled application and chooses a payment method, such as a Virtual Payment Address (VPA) or QR code. The sender enters the amount and then authorizes the transfer by entering their UPI PIN. The system instantly verifies the sender's credentials and securely transfers the funds to the recipient's bank account in real-time, with both parties receiving a confirmation text.