written by Khatabook | August 23, 2021

A Guide on How to Create VPA in UPI and Their Various Benefits

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Table of Content


Cash isn't king anymore. People love online payments and instant money transfers because they are so convenient. A key factor behind digital payments growth in India is the emergence of the UPI (Unified Payments Interface) ecosystem. With UPI, anyone with a bank account can instantly transfer money to anyone else with a bank account through a smartphone. A Virtual Payment Address makes UPI so easy and convenient. Keep reading this article to learn more about virtual payment addresses, VPA in UPI, and how to create VPA.

Did You Know? Seventy-one percent of the users prefer the UPI apps such as PhonePe, Google Pay, Paytm, etc. Furthermore, 14 percent of respondents use cash, and the same proportion uses credit cards.

What is VPA?

A VPA stands for a virtual payment address. VPA is a unique identifier. A person can easily use it to make and request payments from others. One does not need to provide bank details or personal information. Making multiple payments does not require you to enter your bank details repeatedly. VPAs usually have the format abc@bankname. You can either use your bank name or your name here for XYZ. As a result, you could format it as yourphonenumber@oksbi.

How UPI Transactions Take Place Through VPA?

Financial transactions through UPI take place through VPA. To do that successfully, bank account holders who use the UPI payment app must have a linked VPA address. The VPA replaces the bank account details. Using this VPA, you can transfer funds directly from one account to another without providing any other account information.

UPI payments are unique because of the VPA. A VPA's strong point simplifies the UPI payment method. Unlike IMPS, NEFT, digital wallets, and card payments, VPA makes UPI an attractive mobile-based and user-friendly app for fund transfers.

Also Read: What is Financial EDI | Benefits of EDI on Business

Types of VPA

Different types of VPAs are available depending on the transaction and method.

1. Individual-to-individual transactions (Peer-to-Peer): These payments use UPI apps with the payee's VPA or mobile number (if in the contacts).

2. Individual-to-merchant transactions (Peer to Merchant): Individuals and merchants can conduct peer-to-peer transactions using mobile applications and VPAs. The merchant may have a UPI account, QR code, or a payment gateway merchant account in the apps.

How to Create VPA?

These days, setting up a VPA is relatively easy. It does not require any specific knowledge. The following steps will help you create your VPA:-

Step 1: Install the UPI app you wish to use via Google Play Store or Apple App Store depending on your device.

Step 2: After downloading the app, find it and open it.

This example uses the BHIM app to make the illustration more understandable.

Step 3: Click on the profile option from the home screen by selecting the arrow.

Step 4: The primary VPA will appear on the screen if the VPA already exists.

Step 5: Click the right arrow on the screen to move to the next step.

Step 6: In the next page opened create a VPA of your choice.

Also Read: Guidelines on IMPS, NEFT, and RTGS for Your Understanding.

Step 7: Take your pick from the options over the screen for the first part of the VPA. There will be several recommendations available on the net from which you can choose. You can also type in the VPA of your choice and then check and select whether it's available.

Step 8: Check all the information again.

Step 9: To complete the VPA creation, click the submit button.

Step 10: You will be able to create your desired VPA automatically.

Following these steps will make it easier for you to create your VPA accordingly.

How do VPA Transactions work?

When creating VPA and its UPI ID, you must complete a transaction using VPA. In addition to your name, email address, or phone number, this VPA can be anything. It all depends on your ability to remember it. If you want to proceed with the transaction, you should link your contact number to ensure safety. 

You will also receive a notification every time you make a payment this will ensure you with a safe transaction. If you want to make a payment or carry out a transaction, you need to enter your VPA and the amount you want to send or receive. You can send or receive the amount quickly once you have completed this step. If you share your device with someone, you can add a UPI PIN or password to prevent them from making payments without your permission. In this way, you can ensure your safety. You can create your UPI password or pin before registering, but in some apps, you can do it at any time. Validation plays a vital role in the transaction with VPA.

Also Read: What Are the Benefits of Digital Payments Methods for Small Businesses?

Advantages of VPA

The following are the benefits of using VPA.

  • You can make payments using any mobile number-registered account with a sufficient balance.
  • You can track all your transactions in one place using a single virtual address/user name.
  • You can transfer funds to a bank account of your choice by choosing 'Pay with VPA.' You must enter the recipient's VPA, the amount you want to pay, and any remarks you would like to add.
  • The VPA allows you to receive money when you make a request. Adding the target VPA, amount, and remarks is as simple as that. Upon acceptance of the request and authorization, the amount will be credited instantly to your account.
  • Using VPA, you can track the status of your past transactions.
  • Weekends and bank holidays are fine for transferring and receiving money.
  • Transferring funds is possible from anywhere and at any time.
  • Using VPA assures you 100% online and speedy transfers.
  • Instead of transferring money to an e-wallet, UPI retains it in your bank account. While an e-wallet does not pay interest on the money deposited, you will continue to accrue interest.
  • With UPI, you can connect all your bank accounts on one platform. Using a single bank UPI app, you can create VPAs for all your UPI-enabled bank accounts. If your new VPA username is available, you can change your VPA at any time. VPAs are all unique, which further enhances their security.
  • VPA transactions via the UPI platform cost customers almost nothing, unlike NEFT, RTGS, and IMPS, which many banks charge. A further advantage of UPI is that it uses the Immediate Payment System (IMPS) paradigm to enable instant fund transfers.

How to Get VPA?

UPI has become one of the easiest ways to transfer money between bank accounts since its facilitation.

Here are the steps required to transfer funds via UPI using your VPA:

  • Open the UPI payment app and click on 'UPI/Send Money To Anyone.'
  • You could select the receiver from your phone's contact list or enter their mobile number if you didn't save the receiver's contact.
  • You can enter the receiver's VPA on another app if the receiver does not use the app you use
  • Also, you can scan the QR code of the recipient by clicking on the 'Scan QR' option.
  • Click the 'Proceed' button after selecting the bank account to transfer funds.
  • Select a bank account and enter the UPI PIN associated with it
  • You will notice that the amount is transferred from your bank account to the receiver's account as soon as it is processed!

Also Read: IMPS (Immediate Payment Service)- What is IMPS Transfer, IMPS Payment, Timings & Limit

UPI Transaction Limits

UPI transactions are currently limited to ₹1,00,000 per day by the National Payment Corporation of India (NPCI). There is a daily limit of 20 UPI transactions. There is, however, a difference between banks regarding the upper limit. So, the upper limit could range from ₹10,000 to ₹1,00,000. From time to time, the transaction limit may change.

Payments made by UPI are now possible through NPCI's AutoPay service. The facility enables recurring expenses such as telephone bills, OTT charges, etc., using any UPI application such as EMI bills, OTT(Over-the-top) subscription charges, internet charges, electricity bills, etc.

Conclusion

VPAs are currently one of the best methods or techniques to make transactions. The VPA is the best app out there, with a wide range of features. Hopefully, this post has helped you fully understand how to create a virtual prepaid account. It's a relatively simple process that takes less than ten minutes. 

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FAQs

Q: What is the process for changing VPA in UPI?

Ans:

In your UPI app, you can edit and change your VPA. You can edit the VPA under App Settings > VPA> Edit VPA in the app settings.

Q: Can I block my VPA in UPI?

Ans:

You should open the UPI app and disable the particular VPA if you want to block it. Alternatively, you can disable UPI via net banking.

Q: Does VPA require any other bank account information?

Ans:

No. The VPA is all that is required.

Q: If I don't use my VPA, will it expire?

Ans:

It will not expire even if you do not use it for a certain period.

Q: Can I link several bank accounts to one VPA?

Ans:

Yes, this is possible. You can link a VPA to multiple bank accounts.

Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.