What is UPI, VPA, BHIM ? Simply Explained

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We live in a digital age. With mobiles we can do lots of things now. From taking a picture to sending money to someone. We have come a long way. My grandfather still talks about Money Order. How money were sent from post offices via money order. But i bet today’s kids probably never heard about money order. With time we have evolved so much. India has joined other countries in digital payment revolution. Money can be transfer from one account to other just within seconds.

In April 2016, National Payments Corporation of India (NPCI) introduced Unified Payments Interface (UPI) for instant payment system that allows sending or requesting money. and transactions are complete within seconds.

Before we talk about UPI, a little introduction about NPCI would be nice.

What is NPCI ?


Founded in 2008, NPCI is a non-profit organisation owned by an association of major banks, and has been promoted by the Reserve Bank of India. Presently, there are ten core promoter banks (State Bank of India, Punjab National Bank, Canara Bank, Bank of Baroda, Union Bank of India, Bank of India, ICICI Bank, HDFC Bank, Citibank and HSBC).

What is UPI ?

Unified Payments Interface Introduced by NPCI and controlled by the RBI and IBA (Indian Bank Association), is a instant real time payment system that allow transfer of money between two bank accounts through a mobile application. UPI allow multiple bank accounts to linked into a single app.

Some feature of UPI :-

  • Instant transfer of money.
  • Can use 24*7, all day all week.
  • One app for multiple bank accounts.
  • For transactions it Uses VPA ( Virtual Payment Address ), which is your Unique ID given by your bank.
  • With UPI app you can send and receive money by:-
    • Virtual Payment Address (VPA).
    • Mobile number.
    • Account number & IFSC.
    • Aadhaar number.
    • QR code: which enclosed VPA, Account number and IFSC or Mobile number.
  • Also USSD service available. User can use this service by dialing *99# and do service like send, request money, balance enquiry etc. ( service charge applicable, deduct from your mobile balance. usually .50 rupee  )

What is VPA ?

VPA =  Virtual Payment Address, is a unique ID given to every individual using the UPI. It is something like email id, but a financial one. which is directly linked to your bank account to send or receive money. With VPA you don’t need any other information like bank account number or IFSC code for money transfer. VPA is the only information you need if you are using any UPI app.

  • Example of VPA :- If you are using BHIM app, by default your VPA is your mobile number followed by ‘@’ followed by ‘upi’. That is XXXXXXXXXX@upi. However you can create your own VPA like johny@upi etc. if it is available you will get that VPA just like when you create an email.
  • If you are using other upi app like sbi, pnb, your VPA will be something like this XXXXXXXXXX@sbi XXXXXXXXXX@pnb.
  • Every VPA is linked to your bank account. So when someone send money to your VPA then money is instantaneously transfer to your bank.
  • Same VPA can be linked to different banks accounts. but you will have to choose your default bank account. All the transactions will use that bank account until you change your default bank account within UPI App.

Banks that support UPI :-

Almost all the banks support UPI now a days. lets see few banks and their Apps.

  • State Bank of India – BHIM SBI Pay
  • ICICI Bank – iMobile By ICICI Bank and Pockets.
  • HDFC – HDFC Bank Mobilebanking and PayZapp.
  • Axis Bank – BHIM Axis Pay UPI App and Freecharge.
  • Punjab National Bank – BHIM PNB.
  • Paytm Payments Bank – Paytm app.

You can find the entire list of UPI-enabled banks here.

BHIM App :- 

BHIM = Bharat Interface for Money. UPI Mobile App developed by National Payment Corporation of India ( NPCI ). Instantaneous Send or receive money.

Not only Banks provide UPI payment service but there are other apps and mobile wallets which also provides UPI service like  Google Tez, Paytm, PhonePe, Truecaller, Hike, and WhatsApp.

Read More about BHIM App and how to Register here.

How to register and enable UPI ?

  • Download any UPI app. For example BHIM.
  • Register with your mobile number ( number that is registered with your bank )
  • Your mobile number will get verified after receiving otp.
  • Click “Add/Link/Manage Bank Account” option and links the bank and account number with the virtual id.
  • Generating UPI – PIN:
    • Select the bank account.
    • You’ll receives OTP from the bank on your registered mobile number.
    • Enters last 6 digits of Debit card number and expiry date.
    • Enters OTP and enter preferred numeric UPI PIN and clicks on Submit.
    • Thats it. you can start using UPI App.


In summary, NPCI is a non-profit organisation that Introduced UPI. UPI is a Interface that is used for instant transfer of money. For transfer we need a Virtual Address, which is called VPA. which is directly linked to bank account for send or receive funds. To do all these we need a UPI app like BHIM.


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