How to Transfer Money via UPI

Unified Payments Interface (UPI) has revolutionized the way individuals and businesses handle financial transactions in India. Launched by the National Payments Corporation of India (NPCI) in 2016, UPI enables instant, real-time fund transfers between bank accounts using a simple, mobile-based system. Unlike traditional methods that require account numbers, IFSC codes, or net banking logins, UPI allows users to send and receive money using just a Virtual Payment Address (VPA), phone number, or QR code. Its seamless integration with smartphones, low transaction costs, and 24/7 availability have made UPI the most widely adopted digital payment system in the country. Today, over 300 million users rely on UPI for everyday payments—from splitting dinner bills to paying utility bills, recharging mobiles, or transferring salary to family members. Understanding how to transfer money via UPI is no longer optional; it’s essential for financial participation in the modern digital economy. This guide provides a comprehensive, step-by-step walkthrough of UPI money transfers, best practices, recommended tools, real-world examples, and answers to common questions—equipping you with the knowledge to use UPI confidently, securely, and efficiently.

Step-by-Step Guide

Transferring money via UPI is designed to be intuitive, even for users with minimal technical experience. Below is a detailed, sequential guide to help you complete a UPI transaction from start to finish, regardless of the app you’re using—whether it’s Google Pay, PhonePe, Paytm, BHIM, or your bank’s native UPI app.

Step 1: Ensure You Have a UPI-Enabled Bank Account

Before initiating any transfer, confirm that your bank account supports UPI. Almost all major banks in India—including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, Kotak Mahindra, and many regional banks—offer UPI services. If you’re unsure, check your bank’s mobile app or website for a UPI section. You’ll need to have an active savings or current account with a registered mobile number linked to your bank profile. If your mobile number isn’t registered, visit your nearest branch or use internet banking to update it.

Step 2: Download and Install a UPI App

UPI operates through third-party applications that connect to your bank account. Popular options include:

• Google Pay (formerly Tez)
• PhonePe
• Paytm
• BHIM (developed by NPCI)
• Amazon Pay
• Bank-specific apps (e.g., SBI Pay, HDFC MobileBanking)

Download your preferred app from the Google Play Store or Apple App Store. Avoid downloading apps from third-party websites or unknown sources to prevent fraud or malware. Once installed, open the app and proceed to registration.

Step 3: Register Your Mobile Number

Upon launching the app, you’ll be prompted to register your mobile number. Enter the number linked to your bank account. The app will send a One-Time Password (OTP) via SMS. Enter this OTP to verify your identity. This step ensures that only the account holder can activate UPI services on the device.

Step 4: Link Your Bank Account

After verification, the app will ask you to link your bank account. Select your bank from the list provided. If your bank isn’t visible, choose “Add Bank Manually” and enter your bank name. The app will redirect you to your bank’s secure authentication portal. Log in using your internet banking credentials (username and password). Some apps may ask you to generate a UPI PIN during this step; others will prompt you later.

Once authenticated, your bank account will be successfully linked. You may see a confirmation message like “Account Linked Successfully” or “UPI Ready.” You can link multiple bank accounts to the same UPI app, which is useful if you manage personal and business finances separately.

Step 5: Create a Virtual Payment Address (VPA)

A Virtual Payment Address (VPA) is your unique UPI ID—similar to an email address. It typically follows the format: yourname@bankname or yourname@upi. For example: john.doe@sbi or alex99@paytm.

Most apps automatically generate a default VPA based on your phone number or name. However, you can customize it for easier recall. Go to the “Profile” or “UPI ID” section in the app and tap “Edit VPA.” Choose a simple, memorable identifier. Avoid using sensitive personal information like your full name, date of birth, or Aadhaar number. Once set, your VPA becomes your public payment address—share it with others to receive money.

Step 6: Set Your UPI PIN

The UPI PIN (Personal Identification Number) is a 4- or 6-digit security code you create during setup. It acts as your digital signature for every transaction. Choose a PIN that is easy for you to remember but difficult for others to guess. Avoid sequences like “1234” or “0000.” You’ll be asked to confirm your PIN twice. After successful creation, you’ll receive a confirmation message.

Important: Never share your UPI PIN with anyone—not even bank employees or app support personnel. Legitimate services will never ask for it.

Step 7: Initiate a Money Transfer

To send money, open your UPI app and select “Pay” or “Send Money.” You’ll see several options:

• Send via UPI ID
• Send via Mobile Number
• Send via QR Code
• Send via Account Number + IFSC

Choose the method that suits your recipient’s details:

Option A: Send via UPI ID

Enter the recipient’s UPI ID (e.g., sarah@icici). The app will validate the ID and display the recipient’s name. Confirm the details, enter the amount, add an optional note (e.g., “Lunch today”), and tap “Pay.” You’ll be prompted to enter your UPI PIN. After entering it correctly, the transaction is processed instantly. You’ll receive a success message with a unique transaction ID.

Option B: Send via Mobile Number

If the recipient hasn’t set up a VPA, you can send money using their registered mobile number. Enter the number, confirm the name displayed, proceed with amount and UPI PIN, and complete the transfer. This method works only if the recipient has linked their mobile number to UPI.

Option C: Send via QR Code

Many merchants, individuals, and service providers display static or dynamic QR codes. Open the app, tap “Scan QR,” point your camera at the code, and the app auto-fills the recipient’s UPI ID and amount (if dynamic). Review, enter your PIN, and confirm. This is the fastest method for in-person payments.

Option D: Send via Bank Details

If you don’t have the recipient’s UPI ID or mobile number, you can use their bank account number and IFSC code. Select “Bank Transfer,” enter the details, verify the account holder’s name, input the amount, and proceed with your UPI PIN. This method may take slightly longer than UPI ID transfers but still completes within seconds.

Step 8: Confirm Transaction Success

After entering your UPI PIN, the transaction is processed in real time. You’ll see a success screen with:

• Transaction ID
• Amount transferred
• Date and time
• Recipient’s name or VPA
• Option to view receipt or share via WhatsApp/email

Both you and the recipient will receive SMS and in-app notifications confirming the transfer. The money is deducted from your account immediately and credited to the recipient’s account within seconds. There are no holding periods or delays under normal circumstances.

Step 9: View Transaction History

Every UPI transaction is recorded in your app’s transaction history. Access this by tapping “History,” “Transactions,” or “Statements.” You can filter by date, amount, or recipient. Each entry includes the transaction ID, status, and reference note. This record is useful for reconciliation, tax reporting, or resolving disputes. You can also export your transaction history as a PDF or CSV file for record-keeping.

Best Practices

While UPI is secure by design, user behavior plays a critical role in maintaining safety and efficiency. Follow these best practices to protect your finances and ensure smooth transactions.

Use Strong, Unique UPI PINs

Your UPI PIN is the primary security layer for all transactions. Never reuse passwords from other accounts. Avoid birthdays, anniversaries, or sequential numbers. Change your PIN periodically, especially if you suspect unauthorized access. Most apps allow you to reset your PIN through the settings menu using your internet banking credentials.

Never Share Sensitive Information

Legitimate UPI apps or banks will never ask for your UPI PIN, OTP, or internet banking password. Be cautious of unsolicited calls, messages, or emails requesting such details. Scammers often pose as bank representatives or app support. If you receive such a request, hang up or delete the message immediately. Report suspicious activity to your bank’s fraud department through official channels.

Verify Recipient Details Before Sending

Always double-check the recipient’s name and UPI ID before confirming a payment. A small typo in a VPA (e.g., raj@hdfc instead of raju@hdfc) could send money to the wrong person. If you’re paying a business, confirm their official UPI ID from their website or invoice—not from a WhatsApp message or social media post.

Enable Two-Factor Authentication (2FA)

Many UPI apps offer additional security layers like biometric authentication (fingerprint or face recognition). Enable these features in the app settings. This adds an extra barrier against unauthorized access if your phone is lost or stolen.

Keep Your App Updated

Regular updates include critical security patches and bug fixes. Disable automatic updates only if necessary. Outdated apps may lack protection against newly discovered vulnerabilities. Always download updates from official app stores.

Monitor Your Account Regularly

Set up SMS or email alerts for every transaction. Review your bank statement weekly. If you notice an unfamiliar transfer, act immediately. Most banks allow you to reverse unauthorized UPI transactions if reported within 24–48 hours. Delayed reporting may reduce your chances of recovery.

Use Different VPAs for Different Purposes

Create separate Virtual Payment Addresses for personal, business, and online shopping. For example:

• you@family for friends and family
• business@yourcompany for clients
• shopping@upi for e-commerce

This improves organization and reduces the risk of accidental payments. It also helps track income and expenses more effectively.

Be Wary of Public Wi-Fi

Avoid initiating UPI transactions over public or unsecured Wi-Fi networks. These networks are vulnerable to man-in-the-middle attacks. Use mobile data (4G/5G) or a trusted home network when sending money.

Save Receipts and Notes

Always add a descriptive note when making a payment—e.g., “Rent for May,” “Invoice

INV-2024-051.” This helps you and the recipient reconcile payments later. You can also screenshot or email the receipt to yourself for backup.

Tools and Resources

Several tools and resources enhance your UPI experience by improving security, tracking, and convenience. Below is a curated list of essential tools to maximize efficiency.

Official UPI Apps

While third-party apps are popular, the National Payments Corporation of India (NPCI) offers the BHIM app as the official UPI platform. BHIM supports all UPI-enabled banks and includes features like QR code scanning, transaction history, and a built-in help center. It’s lightweight, ad-free, and ideal for users who prefer minimalism.

UPI QR Code Generators

Business owners and freelancers can generate dynamic QR codes for receiving payments. Tools like:

• PhonePe Business – Allows creation of custom QR codes with amount pre-filled
• Paytm for Business – Offers branded QR codes and sales analytics
• UPI QR Generator by NPCI – Free, official tool for merchants

These tools allow you to print QR codes on posters, invoices, or receipts. Dynamic codes can be updated for different amounts without reprinting.

Banking and Finance Dashboards

Use your bank’s mobile app or internet banking portal to view UPI transactions alongside other banking activities. Many banks now integrate UPI into their financial dashboards, offering insights like monthly spending trends, recurring payments, and budget alerts.

Third-Party Expense Trackers

Apps like Money Lover, Wallet by Zoho, and Spendee sync with UPI transaction data (via manual import or bank feed) to categorize expenses. These are invaluable for personal finance management, tax filing, or small business accounting.

Security Tools

Install a reputable mobile security app like McAfee, Bitdefender, or Kaspersky to scan for malware that may attempt to steal UPI credentials. Enable app locking features to require a PIN or biometric authentication before opening your UPI app.

UPI Transaction Status Checker

If a transaction fails or shows as pending, use the NPCI UPI Status Checker tool at upi.cash (official NPCI portal) to verify transaction status using the transaction ID. This helps determine whether the issue lies with the sender, receiver, or bank.

Education and Support Portals

For deeper understanding, visit:

• NPCI UPI Portal – https://www.npci.org.in/upi (official guidelines and FAQs)
• Reserve Bank of India – Digital Payments – https://rbi.org.in (policy updates and consumer advisories)

These portals provide authoritative information on transaction limits, new features, and regulatory changes.

Integration Tools for Developers

For businesses building payment systems, NPCI offers UPI APIs for integration into websites and apps. Developers can access documentation at developer.npci.org.in to implement UPI payment gateways compliant with Indian standards.

Real Examples

Understanding how UPI works becomes clearer when applied to real-life scenarios. Below are five practical examples illustrating common use cases.

Example 1: Splitting a Restaurant Bill

Four friends dine together and agree to split the bill equally. The total is ₹2,800, so each person owes ₹700. One friend opens PhonePe, selects “Pay,” and scans the restaurant’s UPI QR code. They enter ₹2,800, add a note: “Dinner for 4,” and pay. After the payment is successful, they share the receipt screenshot with the group. Each friend then pays their ₹700 share directly to the person who paid the bill using their UPI ID. All transactions complete in under 30 seconds—no cash, no card swiping, no waiting for change.

Example 2: Paying a Freelancer

A small business owner hires a graphic designer for a logo project. The designer sends an invoice with their UPI ID: designer@paytm. The business owner opens Google Pay, selects “Pay,” enters the UPI ID, inputs ₹8,500, adds “Logo Design – Project Alpha,” and confirms with their UPI PIN. The designer receives the payment instantly and marks the invoice as paid. No bank transfers, no delays, no paperwork.

Example 3: Sending Money to a Family Member Abroad

A student in the U.S. wants to send ₹15,000 to their sibling in India for monthly expenses. They use a UPI-enabled remittance app like Wise or Remitly, which allows international users to pay into Indian UPI accounts. The student enters the sibling’s UPI ID, amount, and currency. The app converts USD to INR and initiates the transfer. The sibling receives the money directly into their bank account within minutes, visible in their UPI app as a normal transaction.

Example 4: Paying Utility Bills

A homeowner needs to pay their electricity bill of ₹1,200. Instead of visiting a payment center or logging into the utility company’s portal, they open Paytm, select “Bill Payments,” choose “Electricity,” select their provider (e.g., “BSES Rajdhani”), enter their consumer number, and confirm the amount. They then pay using UPI—either via their VPA or linked bank account. A digital receipt is generated and saved in the app. The payment is reflected in the utility provider’s system within minutes.

Example 5: Receiving Monthly Rent

A landlord rents out an apartment and prefers digital rent collection. They create a static UPI QR code with their VPA: landlord@icici and print it on a poster placed near the entrance. Each tenant scans the code using their UPI app, enters ₹12,000 (the rent amount), adds “Rent – June 2024,” and pays. The landlord receives instant notifications and can track payments monthly through their app’s transaction history. No cheques, no bank visits, no late payments.

FAQs

Is UPI free to use?

Yes, UPI transactions are free for end users. Banks and payment apps do not charge fees for sending or receiving money via UPI. However, some third-party platforms may charge nominal fees for premium services like bulk payments or business analytics.

What is the daily limit for UPI transfers?

The NPCI sets a daily transaction limit of ₹1 lakh (₹100,000) per user across all UPI apps. Individual banks may impose lower limits based on risk assessment. Some apps allow users to increase limits after completing additional KYC verification.

Can I transfer money to someone who doesn’t use UPI?

Yes. If the recipient doesn’t have UPI, you can still send money using their bank account number and IFSC code. The funds will be credited directly to their account via the UPI network. They don’t need to install any app to receive the money.

What happens if I enter the wrong UPI ID?

Before confirming, the app displays the recipient’s name linked to the UPI ID. If the name doesn’t match the person you intend to pay, cancel the transaction. If you proceed and send money to the wrong person, contact your bank immediately. Recovery is possible only if the recipient hasn’t withdrawn the funds and cooperates with the reversal process.

Can I use UPI without a smartphone?

No. UPI requires a smartphone with internet connectivity and a supported app. However, some banks offer USSD-based UPI services (e.g., *99

) for feature phones. These allow basic transfers via text commands but lack the full functionality of smartphone apps.

How long does a UPI transfer take?

UPI transfers are real-time and typically complete within 2–5 seconds. In rare cases of network congestion or system maintenance, delays of up to 15 minutes may occur. If a transaction remains pending beyond 30 minutes, contact your bank.

Can I link multiple bank accounts to one UPI app?

Yes. Most UPI apps allow you to link multiple bank accounts. You can switch between them when sending money. However, you can only set one primary account for receiving funds unless specified otherwise.

Is UPI secure?

Yes. UPI uses end-to-end encryption, two-factor authentication (UPI PIN + OTP), and tokenization to protect transactions. Unlike card payments, your actual bank details are never shared during a UPI transfer. However, user negligence (e.g., sharing PINs or clicking phishing links) remains the leading cause of fraud.

Can I use UPI for international transfers?

Not directly. UPI is designed for domestic transactions within India. However, some international remittance services now integrate with UPI to enable foreign users to send money to Indian bank accounts via UPI IDs.

What should I do if I lose my phone?

Immediately contact your bank and request to block your UPI transactions. Most apps allow remote deactivation via the “Lost Phone” feature. Also, change your internet banking password and monitor your account for suspicious activity. Reinstall your UPI app on a new device and re-link your accounts.

Conclusion

Transferring money via UPI is more than a convenience—it’s a fundamental skill in today’s digital financial ecosystem. With its speed, simplicity, and accessibility, UPI has eliminated the friction that once accompanied traditional banking methods. Whether you’re paying a friend, settling a business invoice, or managing household expenses, UPI offers a secure, efficient, and cost-free solution. By following the step-by-step guide outlined here, adopting best practices for security, leveraging the right tools, and learning from real-world examples, you can harness the full potential of UPI with confidence. As digital payments continue to evolve, mastering UPI ensures you remain financially agile, informed, and empowered. Start using UPI today—not as a novelty, but as your primary method for moving money in the 21st century.