How does VPA work with UPI?

VPA (Virtual Payment Address) acts as a unique digital identifier, often called a UPI ID, linked to a bank account. It works within the UPI system by allowing users to send and receive funds instantly without sharing sensitive details like account numbers or IFSC codes. When a VPA is used for payment, the UPI system validates it and routes the transaction to the linked bank account. A user creates a VPA when registering with a UPI-enabled service provider like Paytm.