--- title: 'What Is Unified Payments Interface (UPI) And How Does It Work? - Unlimit' url: 'https://www.unlimit.com/blog/payments/blog-what-is-upi/' image: 'https://cdn.unlimit.com/wp-content/uploads/2026/10/20111432/COVER-What-Is-Unified-Payments-Interface-UPI-And-How-Does-It-Work_.jpg' language: en published: '2026-10-13T11:13:44+00:00' modified: '2026-10-21T14:17:01+00:00' categories: - Payments --- > The index of this site for AI agents is at https://www.unlimit.com/llms.txt # What Is Unified Payments Interface (UPI) And How Does It Work? The Unified Payments Interface (UPI) is an instant, real-time interbank payment system that enables money transfers directly between bank accounts. It is operated by the National Payments Corporation of India (NPCI) and regulated by the Reserve Bank of India (RBI). UPI was built over NPCI’s Immediate Payment Service (IMPS) infrastructure. In September 2026, NPCI recorded [24.06](https://www.npci.org.in/product/upi/product-statistics) billion UPI transactions worth 29.37 trillion INR. On average, that’s about [802](https://www.business-standard.com/amp/finance/news/upi-transactions-september-2026-mdr-october-15-npci-126100100510_1.html) million transactions a day. The government also reported that UPI users reached around [554.9](https://newsonair.gov.in/government-says-nearly-55-49-crore-users-onboarded-on-upi-as-of-june/) million by June 2026. Accounting for nearly [85.5%](https://www.outlookmoney.com/banking/upi-drives-85-per-cent-of-indias-payment-volumes-rtgs-handles-most-high-value-transfers) of all payment transaction volume in the second half of 2025, accepting UPI is an important step for global merchants to reach and convert customers in India. ## Key takeaways - UPI is an interoperable, instant interbank payment system operated by NPCI and regulated by the RBI. [PhonePe](https://www.unlimit.com/blog/payments/blog-phonepe-for-business-guide/), Google Pay, Paytm, and BHIM are UPI-enabled apps built on top of the rail. - After a customer authorises a payment with their UPI PIN, the payment service provider (PSP) routes the request through NPCI’s switch. NPCI coordinates the debit from the payer’s bank account and the credit to the recipient’s bank account. This means customers don’t share card details or their bank account number with the recipient to make a payment. - Person-to-person transfers are capped at 1,00,000 INR per 24 hours, while verified merchants in high-value categories can receive up to [5,00,000 INR](https://ddnews.gov.in/en/npci-raises-daily-upi-payment-limit-on-p2m-transactions-to-%E2%82%B910-lakh/) per transaction and 10,00,000 INR per day. - A 0.4% merchant discount rate (MDR) on eligible merchant payments above 2,000 INR was scheduled to begin on 15 October 2026. However, a report published on [13 October 2026](https://www.theweek.in/news/biz-tech/2026/10/13/npci-defers-upi-mdr-until-after-diwali.html) said NPCI deferred the change until after Diwali. - International merchants looking to accept UPI payments can’t connect directly to NPCI and should partner with a licensed PSP instead. ## What is Unified Payments Interface (UPI)? UPI is an instant, real-time interbank payment system launched by NPCI and regulated by the RBI. It operates 24/7, allowing users to transfer money between bank accounts using a single identifier, such as a Virtual Payment Address (VPA)/UPI ID, QR codes, or UPI-registered mobile numbers. UPI-enabled apps, such as [PhonePe, Google Pay, Paytm](https://www.unlimit.com/blog/payments/blog-phonepe-vs-paytm-vs-google-pay/), and BHIM, provide the interface through which users access UPI. Because UPI is interoperable, a customer can use one app to pay a merchant whose QR code was generated in another. UPI supports person-to-person (P2P) transfers, person-to-merchant (P2M) payments, and payments made through QR codes or directly to a UPI ID. P2M accounted for [63%](https://www.businesstoday.in/india/story/10-years-of-upi-transaction-value-surges-4000-fold-to-reach-rs314-lakh-crore-550975-2026-08-24) of UPI transaction volume in FY 2025-26, but only 29% of transaction value. ### Who launched UPI in India? NPCI launched UPI under the guidance of RBI and the Indian Banks’ Association (IBA). The pilot launched on [11 April 2016](https://www.digitalindia.gov.in/initiative/unified-payment-interface-upi/) with 21 member banks, and was inaugurated in Mumbai by the then RBI Governor, Dr Raghuram Rajan. UPI became publicly available on 25 August 2016, when banks began releasing UPI-enabled apps on the Google Play Store. Since then, UPI has expanded to [756](https://www.npci.org.in/product/upi/product-statistics) live banks. Annual transaction volume grew from [45.95](https://www.outlookmoney.com/banking/upi-transaction-value-reaches-rs-314-lakh-crore-in-fy26-govt-says-in-lok-sabha) billion in FY 2021-22 to 241.6 billion in FY 2025-26, while transaction value increased from 84.16 trillion INR to 314.23 trillion INR over the same period. Accounting for nearly [49%](https://www.businesstoday.in/india/story/10-years-of-upi-transaction-value-surges-4000-fold-to-reach-rs314-lakh-crore-550975-2026-08-24) of global real-time payment transactions, the International Monetary Fund (IMF) recognised UPI as the world’s largest real-time payment system by volume. NPCI is led by Managing Director and CEO Dilip Asbe, who has held the position since [2018](https://www.npci.org.in/management-team), and has previously served as the organisation’s chief operating officer. ## How does UPI work? 1. The payer opens a UPI-enabled app and enters the payee’s UPI ID or scans their QR code. 2. The payer confirms the amount and enters their UPI PIN to approve the payment. 3. The app forwards the payment request to the PSP. 4. The PSP verifies the request and routes it through the NPCI switch, which validates the addresses and directs the request to the relevant banks. 5. The remitter bank debits the payer’s account, and the beneficiary bank credits the payee’s account. 6. The transaction status is sent back through the network, allowing both the payer and payee to see the outcome almost simultaneously. ### The role of NPCI and IMPS [NPCI](https://ies.gov.in/arthapedia/concept/unified-payments-interface-upi) is a non-profit organisation established by the RBI and IBA in [2008](https://www.npci.org.in/purpose-value). It began operating India’s retail payment infrastructure in 2009. UPI was developed using NPCI’s IMPS infrastructure, which enables 24/7 real-time interbank fund transfers. NPCI describes UPI as an advanced version of IMPS, with features such as virtual payment addresses, single-step two-factor authentication, and the ability to link multiple bank accounts to one app. Unlike traditional IMPS transfers, which typically require the beneficiary’s bank account number and IFSC code, UPI lets users pay using a single identifier, such as a UPI ID. IMPS remains a separate NPCI service, and NPCI reports its transaction volumes separately from UPI’s. NPCI also operates other payment systems, including RuPay, FASTag, Bharat BillPay and the Aadhaar Enabled Payment System (AePS). Its subsidiary, [NPCI International Payments Limited (NIPL)](https://www.nipl.com/), works to expand the international acceptance and adoption of UPI and RuPay. ### Participants in a UPI transaction ### What is a UPI ID/Virtual Payment Address (VPA)? A UPI ID, also known as the Virtual Payment Address (VPA), is a unique identifier used to send and receive money through UPI. It reduces the need to share sensitive payment details, such as the account number, card number, or CVV. A UPI ID typically follows the format yourname@bankhandle and links to one or more bank accounts on the UPI network. The part before the @ is the username, which users can choose or an app may generate based on their name or mobile number. The part after it is the handle, which identifies the app or PSP associated with the address. A [UPI Number](https://www.businesstoday.in/amp/personal-finance/banking/story/npci-to-tighten-upi-rules-peer-to-peer-collect-feature-to-end-in-october-489244-2025-08-13) is an additional payment address linked to a UPI ID, which can be a user’s ten-digit mobile number. According to NPCI’s launch [announcement](https://egovernance.vikaspedia.in/viewcontent/e-governance/digital-payment/unified-payment-interface/unified-payment-interface-usage-examples-and-samples?lgn=en), customers can hold multiple virtual addresses for accounts across different banks. Some apps also let users link multiple bank accounts to one VPA, with one account set as the default. Individuals can create personal VPAs through consumer payment apps for P2P transfers and everyday payments. Merchant VPAs are generally set up through a bank or payment service provider as part of merchant onboarding and may be embedded in the QR code customers scan to pay. Merchant onboarding also involves business verification and settlement arrangements that generally don’t apply to personal VPAs. ## Types of UPI transactions ### Send money via UPI ID When a payer initiates a transfer using a UPI ID and authorises the debit from their own account, it is known as a push payment. Since [1 October 2025](https://www.businesstoday.in/amp/personal-finance/banking/story/npci-to-tighten-upi-rules-peer-to-peer-collect-feature-to-end-in-october-489244-2025-08-13), this has also been the only way to make P2P UPI transfers, after NPCI discontinued P2P collect requests to curb fraud. To initiate a transaction using a UPI ID, the payer: 1. Opens a UPI-enabled app 2. Enters the recipient’s details, such as typing their UPI ID, scanning their QR code, or selecting a contact linked to a supported UPI payment address 3. Verifies the recipient’s displayed name and enters the amount to transfer 4. Chooses a bank account to debit and authorises the payment by entering their UPI PIN, or with a fingerprint or face scan if the app supports it 5. Check the confirmation screen, which shows the transaction reference and status. ### Receive money and collect requests Receiving UPI payments typically involves sharing a UPI ID or QR code and letting the payer initiate the transfer without exchanging card or bank account details. However, in the pull flow, the recipient sends a payment request that the payer must approve. The NPCI discontinued P2P collect requests on UPI from [1 October 2025](https://www.outlookbusiness.com/news/npci-to-stop-upi-p2p-collect-requests-from-oct-1-to-combat-fraud). Merchant collect requests, such as those used during checkout on e-commerce and travel platforms, can still be used. A merchant collect request appears as a notification in the payer’s UPI app. It displays details such as the merchant’s name, requested amount and transaction reference. No money is debited until the payer approves and authorises the request with their UPI PIN. Merchants should raise requests only for genuine orders, use clear references and avoid sending duplicate requests. NPCI has also restricted collect requests from unverified and smaller merchants to [2,000 INR](https://www.medianama.com/2025/08/223-npci-p2p-collect-payments-oct-1-what-it-means/). NPCI’s [API guidelines](https://www.scconline.com/blog/post/2025/07/30/upi-changes-starting-august-1-ncpi-guidelines-upi-api-usage-2025/), enforced from 1 August 2025, limit status checks for failed or pending transactions to three attempts, with at least 90 seconds between checks. Merchant systems should use status callbacks or notifications from their payment provider wherever available, rather than repeatedly polling for updates. ### QR code payments A UPI QR code contains payment details that help route a payment to the intended recipient. They come in two common types: static and dynamic. A static QR code contains the merchant’s UPI ID, so the payer enters the amount manually. A dynamic QR code is generated for a specific transaction and can include details such as the amount and an order reference. The payer reviews the pre-filled details before authorising the payment. Static QR codes suit physical shops and counters, where customers enter the amount at checkout, while dynamic QR codes are ideal for online checkout because transaction-specific details make it easier to reconcile payments with individual orders. Merchants accepting UPI online should consider supporting the following three payment flows: - **Dynamic QR code:** Display a transaction-specific QR code on desktop checkout so customers can scan it using a UPI app on their phones - **UPI app intent:** On supported mobile devices, redirect customers to their chosen UPI app to review and authorise the payment - **Collect request:** Let customers enter their UPI ID and approve a payment request in their UPI app, where this flow is supported and permitted under current NPCI rules. For small merchants, UPI QR acceptance can be cost-effective. According to NPCI, merchants enrolled under its P2PM framework who receive up to 1,00,000 INR per month through UPI QR codes remain eligible for [zero MDR](https://www.scconline.com/blog/post/2026/09/16/npci-released-upi-mdr-faqs-explained/). ### UPI Lite and low-value payments UPI Lite is an on-device wallet funded by a linked bank account that lets users make small payments without entering their UPI PIN for every transaction. It is designed for frequent, low-value purchases such as public transport, snacks and parking, where repeated authentication can slow down checkout. Transaction limits increased after an [NPCI circular](https://www.outlookmoney.com/banking/upi-lite-is-here-with-enhanced-featurescan-you-use-it-online-know-the-details) dated 27 February 2025. The maximum transaction amount rose from 500 INR to 1,000 INR, while the wallet balance limit rose from 2,000 INR to 5,000 INR. Wallet top-ups require online authentication with an additional factor, and supported apps may offer automatic top-ups. A related service, [UPI Lite X](https://www.ujjivansfb.bank.in/banking-blogs/banking-services/upi-payments-without-internet), supports offline payments through near-field communication (NFC) on compatible devices. Its [transaction limits](https://www.ujjivansfb.bank.in/banking-blogs/banking-services/upi-lite-litex-vs-regular-upi-guide) are lower: a maximum of 500 INR per transaction and a daily usage limit of 4,000 INR, compared to 10,000 INR for UPI Lite. Each UPI Lite wallet is linked to a bank account and the associated mobile number. Unused balances in dormant wallets are returned to the linked bank accounts. Merchants generally receive UPI Lite payments as regular UPI payment credits, and typically don’t need a separate integration to accept them. ## UPI transaction limits (2026) The standard UPI limit for P2P transfers is 1,00,000 INR per transaction, with higher ceilings for verified merchants in certain categories. NPCI sets the overall ceilings, but individual banks and apps may impose lower limits. For that reason, the limit a given user sees may vary by bank, app and merchant category. For instance, [HDFC Bank](https://www.hdfc.bank.in/upi/limit) publishes a limit of 1,00,000 INR or 20 transactions within 24 hours for P2P and P2M payments. Some rural and regional banks may apply lower limits, so users should check their bank’s rules for the applicable cap. On [15 September 2025](https://ddnews.gov.in/en/npci-raises-daily-upi-payment-limit-on-p2m-transactions-to-%E2%82%B910-lakh/), NPCI increased transaction limits for verified merchants in several categories. For eligible transactions, the revised ceilings include: - Up to 5,00,000 INR per transaction and 10,00,000 INR per day for insurance, capital markets, travel, collections and Government e-Marketplace (GeM) - Up to 5,00,000 INR per transaction and 6,00,000 INR per day for credit card bill payments - Up to 2,00,000 INR per transaction and 6,00,000 INR per day for jewellery. ## UPI fees for merchants and users UPI transfers are free for individuals making P2P payments. Since January 2020, UPI payments from bank accounts to merchants have also operated under a zero-MDR framework. However, on 15 September 2026, NPCI announced a [0.4%](https://www.scconline.com/blog/post/2026/09/16/npci-released-upi-mdr-faqs-explained/) MDR on specified P2M UPI transactions above 2,000 INR, initially scheduled to take effect on 15 October 2026. Reported details included a 300 INR cap per transaction for payments of 75,000 INR or more, along with a flat 5 INR fee for specified categories, such as railway and telecom payments. NPCI stated that consumers wouldn’t pay an additional fee and that merchants couldn’t pass the charge on to them. On [13 October 2026](https://thefederal.com/category/business/mdr-on-upi-deferred-no-new-date-announced-for-implementation-259422), NPCI deferred the rollout. The UPI and Services Steering Committee said that, keeping the festive season in mind, it would announce a new implementation date [after Diwali](https://www.theweek.in/news/biz-tech/2026/10/13/npci-defers-upi-mdr-until-after-diwali.html). RuPay credit card payments through UPI follow a separate fee framework. NPCI’s October 2022 circular provided for zero MDR on eligible transactions of up to and including [2,000 INR](https://www.canarabank.bank.in/documents/d/guest/mdr-on-rupay-cc-on-upi-txns). For payments above that threshold, banks apply MDR based on the merchant category and applicable terms, with rates ranging from [0.5% to 1.75%](https://www.canarabank.bank.in/documents/d/guest/mdr-on-rupay-cc-on-upi-txns) per transaction. ## UPI security and authentication UPI applies multiple security measures, including device binding, a UPI PIN, and limited sharing of sensitive payment information. Device binding links a UPI app to the mobile device and SIM associated with the user’s registered mobile number. The UPI PIN provides an additional layer of authentication by requiring the payer to enter a 4-digit code known only to them. Together, these mechanisms support two-factor authentication within a single payment step. NPCI describes this as single-click two-factor authentication, designed to align with applicable regulatory guidelines. The government has also highlighted risk-based transaction limits and protections against unauthorised changes to registered mobile numbers. ### The UPI PIN The UPI PIN is a four- or six-digit code used to authorise payments from a linked bank account through UPI. The account holder sets the PIN, and it is specific to each linked bank account. The PIN must remain confidential and should never be shared with a payee, payment app provider or anyone else. The standard setup process typically involves these steps: 1. The user opens the UPI-enabled app and selects the linked bank account they want to set a PIN for 2. The user enters the last six digits of their debit card number and its expiry date 3. The user enters the one-time password (OTP) sent for verification 4. The user creates and confirms their UPI PIN. NPCI has also enabled Aadhaar-based face authentication for eligible Aadhaar-linked accounts to set or reset a UPI PIN. Separately, NPCI introduced an optional on-device [biometric authentication](https://ibsintelligence.com/ibsi-news/pop-adds-biometric-authentication-for-upi-payments/) method to authorise payments using a phone’s fingerprint or face-unlock feature. The biometric data stays on the device, and the UPI PIN remains available as an alternative. ### Two-factor authentication in the 2026 framework The RBI’s digital [payment authentication framework](https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61282) sets minimum security requirements for UPI and other domestic digital payments, which revolves around four key principles: - **Two-factor authentication:** Digital payment transactions must use at least two distinct authentication factors, unless an applicable exemption applies - **Independent factors:** Compromising one authentication factor must not compromise the reliability of the other - **Dynamic authentication:** For transactions other than card-present payments, at least one factor must be dynamically created or proven, making its proof specific to the transaction - **Risk-based checks:** Issuers can introduce additional authentication measures based on the assessed risk of a transaction. The framework also permits newer authentication methods while retaining SMS-based OTPs as an option. It doesn’t mandate a single authentication technology for every transaction. ## Who is eligible for UPI? Anyone with an eligible Indian bank account and a registered mobile number can use UPI. For merchants, eligibility depends on where the business is registered. ### Users To use UPI, an individual generally needs a bank account at one of the [756](https://www.npci.org.in/product/upi/product-statistics) banks live on UPI and a registered mobile number. Non-resident Indians (NRIs) with eligible Non-Resident External (NRE) or Non-Resident Ordinary (NRO) accounts can use UPI with international mobile numbers from the [12](https://www.business-standard.com/amp/finance/personal-finance/idfc-first-bank-launches-upi-for-indians-in-12-countries-how-service-works-125062500738_1.html) supported countries, including Australia, Canada, France, Hong Kong, Malaysia, Oman, Qatar, Saudi Arabia, Singapore, the United Arab Emirates, the United Kingdom and the United States. Visitors to India without an Indian bank account may be able to use [UPI One World](https://www.npci.org.in/product/upi-global-acceptance/upi-one-world), a prepaid wallet service made available through authorised providers. ### Merchants Businesses registered in India can accept UPI through their bank or a licensed PSP. Foreign-registered businesses generally need to work with an RBI-authorised payment aggregator to facilitate cross-border payments. These providers are known as [Payment Aggregators-Cross Border (PA-CBs)](https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=12561). The RBI brought PA-CBs under direct regulatory oversight in 2023 and subsequently consolidated the regulatory framework in the Regulation of Payment Aggregators Directions, 2025. ## UPI internationalisation: Where UPI is accepted outside India ## UPI vs Venmo, Pix, PayNow and cards Venmo is a consumer peer-to-peer payment app owned by PayPal, while UPI is an interbank payment system operated by NPCI that can be accessed through multiple banks and payment apps. UPI payments typically debit the payer’s linked bank account directly. Venmo operates within its own payment ecosystem, with transfers and funding options tied to the US banking system. Pix is Brazil’s instant payment system, operated by the Central Bank of Brazil. It processed [79.8](https://clearingpost.com/insights/pix-breaks-all-records-in-2025-798-billion-transactions-move-r-3536-trillion/) billion transactions in 2025 and recorded a single-day high of [318](https://www.riotimesonline.com/brazil-pix-record-318-million-payments-one-day-2026/) million payments on 4 September 2026. Card payments run through card networks and follow the relevant authorisation, clearing and settlement processes. Merchants typically pay an MDR on eligible card transactions. ## How merchants accept UPI payments Merchants can accept UPI through a bank or a licensed payment aggregator that provides the necessary payment interfaces and handles transaction processing and settlement. Common integration options include static QR codes, dynamic QR codes, an in-app payment intent, and merchant collect requests, where permitted. Foreign-registered businesses generally need to work through a payment aggregator authorised to facilitate cross-border transactions into India. Before committing to a payment aggregator, merchants should evaluate: - **Regulatory authorisation:** Whether the provider is authorised for the relevant cross-border transaction processing and settlement - **Payment coverage:** Which UPI apps and payment flows are supported - **Settlement terms:** The settlement currency, schedule, fees and foreign-exchange arrangements - **Refunds and disputes:** How refunds are processed and how transaction issues are resolved - **Pricing:** The applicable MDR schedule, including how the provider will handle any deferred UPI fee changes if they are implemented - **Reconciliation and support:** Availability of transaction reports, notifications, and operational support. [Unlimit](https://www.unlimit.com/) is a financial infrastructure provider authorised under India’s PA-CB framework. It enables international merchants to accept UPI payments alongside cards and over 1,000 [alternative payment methods](https://www.unlimit.com/payment-methods/). For most merchants, the UPI integration sequence is typically: 1. Verifying the provider’s RBI authorisation and whether it covers the relevant transaction direction 2. Providing the required business, KYC and goods-or-services information and completing onboarding 3. Enabling UPI and selecting the supported payment flows, such as dynamic QR codes, app intent, and collect requests 4. Using the provider’s sandbox to test successful payments, declines, failures and timeouts 5. Going live and monitoring payment success rates by integration method and, where available, by UPI app. After receiving UPI payments, Merchants should confirm payment status on their own systems before fulfilling an order: 1. Match the provider’s callback or webhook to the relevant order reference 2. Verify the transaction status and amount against the order details 3. Release goods or services only after receiving a confirmed success status. 4. If a payment remains pending, wait for the provider’s status update rather than repeatedly querying the transaction 5. Reconcile completed transactions against the provider’s settlement reports. ## What are the new UPI rules in 2026? - **RBI authentication directions:** The [RBI’s 2025](https://www.rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=61282) directions set a minimum two-factor authentication requirement for digital payment transactions, subject to applicable exemptions, along with risk-based checks. - **MDR on selected P2M payments:** NPCI announced a [0.4%](https://www.scconline.com/blog/post/2026/09/16/npci-released-upi-mdr-faqs-explained/) merchant discount rate for specified P2M transactions above 2,000 INR, with an intended start date of 15 October 2026. On 13 October 2026, NPCI deferred the rollout until after Diwali, with no new effective date announced. - **Higher merchant transaction limits:** NPCI [raised limits](https://ddnews.gov.in/en/npci-raises-daily-upi-payment-limit-on-p2m-transactions-to-%E2%82%B910-lakh/) for specified, verified merchant categories, including limits of 5,00,000 INR per transaction and 10,00,000 INR per day. - **UPI API usage caps:** Reported limits include [50](https://www.scconline.com/blog/post/2025/07/30/upi-changes-starting-august-1-ncpi-guidelines-upi-api-usage-2025/) balance checks per app per day, 25 linked-account views, and no more than three status checks for a transaction under the applicable rules. - **P2P collect requests:** NPCI stopped peer-to-peer [collect requests](https://www.businesstoday.in/amp/personal-finance/banking/story/npci-to-tighten-upi-rules-peer-to-peer-collect-feature-to-end-in-october-489244-2025-08-13). Users can still initiate payments by entering a UPI ID, scanning a QR code, or selecting an eligible contact. - **Biometric payment authentication:** An NPCI circular dated 7 October 2025 introduced an optional [biometric authentication](https://www.businesstoday.in/amp/personal-finance/news/story/no-more-pins-upi-to-get-face-and-fingerprint-authentication-for-faster-safer-online-payments-497815-2025-10-11) route using fingerprints or facial recognition on supported devices. - **UPI Circle and Reserve Pay:** [UPI Circle](https://thepaypers.com/payments/news/india-prepares-agentic-payments-rollout-on-upi-network) allows a primary user to delegate certain payments to a secondary user. Reserve Pay lets users earmark funds for future debits. - **Agentic payments:** Reuters reporting published by Business Recorder on 1 September 2026 said NPCI was preparing a [Unified Agent Protocol for UPI](https://www.brecorder.com/news/40437409). ## UPI in numbers: Scale and adoption UPI processed 24.07 billion transactions worth 29.37 trillion in September 2026, and it has the largest share of India’s payments of any rail. ## FAQ **What is the full form of UPI?**UPI stands for Unified Payments Interface. It is an instant payment system developed by the National Payments Corporation of India (NPCI) that enables real-time transfers between participating bank accounts. The Reserve Bank of India (RBI) oversees India’s payment systems and their regulatory framework. **Is UPI free?**P2P UPI transfers are generally free. Merchant payment charges depend on the payment type and applicable rules. In September 2026, NPCI announced a 0.4% MDR on selected P2M payments above 2,000 INR, then deferred its rollout on 13 October. **What is the difference between UPI and a UPI ID?**UPI is the payment system, and a UPI ID, also known as a Virtual Payment Address (VPA), is the identifier used to send or receive money through it. A UPI ID enables money transfers without sharing the payer’s or payee’s bank account number and IFSC code. **Can foreign-registered merchants accept UPI?**Foreign-registered merchants can accept UPI through a payment provider authorised to facilitate the relevant cross-border transactions into India. The provider manages payment processing and applicable compliance requirements in India. Before signing up, merchants should confirm that the provider’s authorisation covers their transaction flow, along with settlement currencies, conversion rates, fees and refund procedures. **Is UPI safe?**UPI incorporates security measures such as device binding and UPI PIN authentication. For standard UPI ID-based payments, users also don’t share their bank account number or card details with the recipient. **What is the difference between UPI and IMPS?**Both UPI and IMPS support instant bank transfers, but they offer different ways to initiate payments. IMPS is an instant interbank transfer service operated by NPCI. UPI builds on the IMPS infrastructure and adds features such as virtual payment addresses, QR-code payments and app-based payment flows. **Which UPI apps are most used?**PhonePe, Google Pay and Paytm are among India’s most-used UPI apps. According to [NPCI data](https://entrackr.com/news/upi-transaction-volume-stays-above-24-bn-despite-18-m-o-m-dip-in-september-12611636), their shares of UPI transaction volume in August 2026 were 45.64%, 32.26% and 8.03%, respectively. Together, they accounted for 85.93% of the volume reported. **Can UPI be used offline?**UPI can be used offline through services such as \*99# USSD, UPI 123PAY for feature phones, and UPI Lite X for NFC-based tap-to-pay on supported devices. Each service has its own eligibility requirements and transaction limits. For example, under the RBI’s published framework, UPI Lite supports transactions of up to 1,000 INR and a maximum balance of 5,000 INR.