What is UPI?

Launched by NPCI in 2016, UPI moves money instantly between any two bank accounts using a smartphone app. Instead of sharing account numbers and IFSC codes, users identify each other with a simple UPI ID (VPA) or QR code, and transfers settle within seconds at any hour of any day.

For merchants, UPI is transformative because standard bank-to-bank person-to-merchant payments carry zero MDR — no percentage is deducted from your sale, unlike card machines or payment gateways which typically charge 1–2% plus setup costs. Note that RuPay credit card on UPI transactions above ₹2,000 may carry an interchange fee per NPCI circulars.

Every UPI payment needs two things: a valid VPA linked to a real bank account, and the payer's UPI PIN entered on their own device. No OTPs are ever shared with the payee — anyone asking for your PIN or OTP to 'receive' money is running a scam.