UPI India
Payments by Alias in the Unified Payments Interface (UPI) in India
Overview of Service
A central principle of UPI is that users should be able to send funds across a variety of payments addresses, including bank account numbers, mobile numbers, and virtual payment addresses. The virtual payment address is itself an innovation allowed by UPI.
Supported Aliases
Every VPA has a standard format, which consists of your mobile number/name/email ID (which makes it unique) followed by the bank or third party app’s name. Users can set up an email-style payment address with their bank (e.g., filmfanatic@sbi) or with NPCI (e.g., avocado@UPI), which then becomes the only identifier needed to receive payments.
For example, Paytm creates a unique virtual payment address for its users by simply concating a user's mobile number followed by the term – “@paytm”. For instance, if a users mobile number is 98450*****, then their Paytm VPA would be 98450*****@paytm.
Alias Directory Model
UPI operates on both a Centralized as well as a Decentralized Model, meaning that Alias to Account mapping may be held at NPCI itself or by the participating Financial Institutions. This varies depending on a number of factors.
If the address is a mobile number, a bank account number, or a virtual address held by a bank, NPCI does not maintain bank account data or any other information beyond the identifier (e.g., the payments address) and the bank identification number. It simply routes the transactions for address translation.
However, there are exceptions where the sender is using USSD or where the virtual address is held by NPCI (a @UPI address). In these scenarios, NPCI holds the bank account data for routing
How to Send or Receive funds using VPA
A person or business can pay to any VPA from their online banking channels provided by FSPs or through Third Party Payment Initiating apps.
When someone enters your VPA, they will be shown that the VPA is registered to you by name so that they can confirm that they’re paying the right person before they hit send. They can also click on a ‘Scan QR’ option if provided by the sending FSP/App and can then scan the recipient’s QR code.
If the details are correct and there are no exceptions, funds should be received within a limited time frame.
References to Supporting Material
This page leans on prior work from CGAP under the working paper "National Payments Corporation of India and the Remaking of Payments". https://www.cgap.org/research/publication/national-payments-corporation-of-india-and-remaking-of-payments
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