What is VPA in UPI and How to Create One?

India's digital payment ecosystem has experienced remarkable growth, with the Unified Payments Interface (UPI) leading the charge. In the first half of 2024, UPI transaction volumes surged by 52%, reaching 78.97 billion, and the total transaction value increased by 40%, amounting to ₹116.63 trillion. 

This surge underscores the need for secure and efficient payment methods. A key component in this digital transformation is the Virtual Payment Address (VPA), a unique identifier that simplifies and secures online transactions.

What is VPA?

A Virtual Payment Address (VPA) is a unique identifier linked to your bank account, enabling seamless transactions without the need to share sensitive bank details. Typically, a VPA follows the format <username@bankname>. This system is part of the Unified Payments Interface (UPI) framework, which facilitates instant money transfers between bank accounts.

How VPA Works

When you create a VPA, it becomes your digital identity for financial transactions. To send money, you enter the recipient's VPA, and the UPI system processes the payment by linking the VPA to the recipient's bank account. This process eliminates the need for sharing bank account numbers or IFSC codes, enhancing security and user convenience.

How to Create VPA

Creating a VPA is a straightforward process:

1. Download a UPI-enabled App

   Choose a UPI-enabled application from your bank or any other participating bank.

2. Register and Set Up

   Open the app, register using your mobile number, and set up your profile.

3. Create VPA

   Navigate to the 'Profile' or 'Manage Account' section and select the option to create a new VPA.

4. Choose Your VPA

   Enter your desired username and select your bank's name from the list.

5. Confirm

   Verify your details and confirm the creation of your VPA.

Once set up, your VPA is ready for use in transactions.

What is the Difference Between VPA and UPI ID?

Both VPA and UPI ID are the same. The are both short for Virtual Payment Address, which is a unique identifier for a bank account. In the UPI system, both the terms are used interchangeably.

Benefits of VPA

• Enhanced Security: VPAs reduce the risk of fraud by eliminating the need to share sensitive bank account information.
• Convenience: Transactions are simplified, requiring only the recipient's VPA, making payments quick and easy.
• Cost-Effective: UPI transactions, including those using VPAs, are typically free or incur minimal charges, making them an economical choice for users.
• Universal Acceptance: VPAs are accepted across all UPI-enabled platforms, ensuring wide usability.