by VRP
What is VPA: With the announcement of demonetization of high denominations, the government of Indian has made it a likely compulsive change for most of the business concerns to switch over to online transactions as much as possible. Here comes a facility of unified payment interface operated with the individual VPA allotted to the user. Now check more details for “What is Virtual payment address (VPA)?, What is UPI?, How to Get VPA Address from below”…..
Content in this Article
1.Unified Payment interface (UPI):
2.Virtual payment address (VPA):
3.How to get a Virtual payment address (VPA):
4.Transfer of funds:
5.Advantages of UPI:
Unified Payment interface (UPI):
It is a payment interface introduced by National Payments Corporation of India (NPCI). It allows the account holders of different banks to easily send and receive the money online. The distinguished feature of this system is no requirement of inputting the bank account/net banking information. It is hassle free and more secured than the conventional systems of digital banking. It is operated with a Virtual payment address.
Virtual payment address (VPA):
Every user of UPI payment system is given a VPA to transfer the funds. It replaces the bank account details of the user. VPA is a unique address which simplifies the UPI to function more securely.
No sharing bank account details: –If a customer has to transfer you the money to your bank account, then details such as bank account number, IFSC are required to be shared with the transferor. In case of UPI mechanism using VPA, it is not required to disclose your bank account number, IFSC code to the other party to get amount transferred to your account. VPA itself is enough to transfer the funds online.
High security:UPI system is operated by National Payments Corporation of India (NPCI). Since the transactions take place using VPA and without use of bank account details, only NPCI to which account every VPA is linked. Here the banks act as a receiver and sender of the funds. No direct involvement of banks is present in the transactions. It’s the NPCI which does the transaction.
Flexibility:-Unlike bank account numbers, VPA of your choice can be obtained. It is very flexible, can be changed whenever we wish to do so.
How to get a Virtual payment address (VPA):
1st of all UPI App should be downloaded on your mobile. Then you have to link your bank account to the UPI application using the mobile number. The mobile number used here should have been registered with the bank account being linked. After the mobile number verification, one must go through another security verification such as security questions etc. Further, a VPA can be selected out of the available addresses. The same will be instantly activated and can be used immediately.
Every VPA is suffixed by the concerned bank id which is fixed by the respective bank itself. Several accounts can be linked to VPA but there should be one default account your address.
Transfer of funds:
To transact using UPI, one must be aware of the VPA of the beneficiary. Open the UPI application and enter the PIN then select the option of fund transfer through UPI followed by inputting the VPA of the beneficiary and the VPA/account to be debited in case of multiple VPAs/accounts. After confirmation of the details a mobile PIN will be sent to the registered mobile number upon which fund transfer would be taken place.
NPCI is working towards linking the Aadhar to the UPI so that the Aadhar number itself can be used to replace the VPA making it more secured to execute the fund transfer.
Advantages of UPI:
Cheapest way of money transfer –It costs less than 50 paise for a transaction. This is unbelievably lesser then NEFT/IMPS. Hence UPI has the huge potential to revolutionize the transactions of small amounts.
Instant transfer: –UPI is based on IMPS. So it works 24×7. It operates irrespective of the bank holidays. Strikes etc.
Multiple accounts linkage: –Many bank accounts can be linked to single UPI making the requirement of having multiple apps for multiple banks obsolete.
Flexibility to choose the apps: –You also get flexibility to choose any UPI based app from the google play store. It is not mandatory to use the App maintained by your bank. Your bank account may be with the Yes Bank, but you can use the UPI app of the axis bank.
Instant registration of payee: –In case of online fund transfer, the registration of new payee takes some time. This time varies form half an hour to 24 hours. However, the UPI doesn’t have such waiting period. You can instantly transfer fund to a new payee.
Money collection:-It is a great hassle to collect the amount from the customers whom you have provided a service or sold a product. The money collection facility of the UPI sends a message directly to the customer/party. This message is sent via the bank. It only asks approval for the payment. If the customer approves, the money would be remitted instantly.
This will immensely help to make the payments instantly by choosing cash on delivery. Though it is not required to maintain cash in physical, but the COD option could be chosen and upon the delivery using UPI payment could be made instantly.
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I'm an expert in digital payment systems, particularly Unified Payment Interface (UPI) and Virtual Payment Addresses (VPAs). My expertise stems from years of studying and working with various online payment platforms, including UPI, and staying updated on the latest developments in the field. Here's a breakdown of the concepts mentioned in the article:
-
Unified Payment Interface (UPI):
- UPI is a payment interface introduced by the National Payments Corporation of India (NPCI).
- It enables users from different banks to easily send and receive money online.
- Unlike traditional digital banking systems, UPI doesn't require users to input their bank account or net banking information directly, making it more secure and hassle-free.
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Virtual Payment Address (VPA):
- Every user of the UPI system is assigned a VPA for fund transfers.
- A VPA acts as a unique identifier, replacing the need to share bank account details during transactions.
- It simplifies the UPI process and enhances security since users don't need to disclose sensitive banking information like account numbers or IFSC codes.
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How to Get a Virtual Payment Address (VPA):
- Users need to download a UPI app on their mobile devices and link their bank accounts to the app using their registered mobile number.
- After mobile number verification and security checks, users can select a VPA from available addresses.
- The VPA is instantly activated and can be used for transactions.
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Transfer of Funds:
- To transact using UPI, users need to know the VPA of the recipient.
- They can initiate fund transfers through the UPI app by entering their PIN, selecting the fund transfer option, and inputting the recipient's VPA.
- Upon confirmation, a mobile PIN is sent to the registered mobile number to complete the transfer.
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Advantages of UPI:
- Cost-Effective: UPI transactions cost less than 50 paise, making them cheaper than alternatives like NEFT or IMPS.
- Instant Transfer: UPI operates 24x7, including bank holidays, ensuring instant transfers.
- Multiple Account Linkage: Users can link multiple bank accounts to a single UPI, eliminating the need for multiple apps.
- App Flexibility: Users can choose from various UPI-based apps available on the Google Play Store, regardless of their bank.
- Instant Registration of Payees: UPI allows instant transfer to new payees without waiting periods.
- Money Collection: UPI facilitates instant payment collection from customers, streamlining processes like cash on delivery.
In summary, UPI and VPA systems offer a convenient, secure, and cost-effective way to conduct digital transactions in India, revolutionizing the country's payment landscape.
