UPI (Unified Payments Interface) is India's most widely used digital payment system that enables real-time bank-to-bank fund transfers through mobile devices. Developed by the National Payments Corporation of India (NPCI) and launched in August 2016, UPI allows users to send and receive money instantly using a Virtual Payment Address (VPA) without sharing bank account details.
UPI processed billions of transactions in FY2025, making it one of the world's largest real-time payment systems. Understanding how UPI works can help you make faster and more secure digital payments.
Bajaj Pay on Bajaj Finance simplifies digital payments by providing a secure, convenient, and seamless way to pay bills, recharge services, and manage everyday transactions online.
UPI features and benefits: Why UPI is India's top payment system
Convenience
Bajaj Pay UPI allows you to make digital payments seamlessly using just your mobile phone. It eliminates the need for physical cash and simplifies transactions.
Instantaneous transactions
Payments through Bajaj Pay UPI are instant, which ensures that money is transferred quickly between accounts, even outside regular banking hours.
24/7 availability
Bajaj Pay UPI operates round the clock, including weekends and holidays, making it convenient for users to make transactions whenever needed.
Variety of services
Besides person-to-person (P2P) transfers, Bajaj Pay UPI can be used for bill payments, online shopping, ticket bookings, and more, consolidating various financial transactions into one platform.
Security
Bajaj Pay UPI transactions are secured with multiple layers of authentication, including PINs and biometrics, reducing the risk of fraud.
No need for bank account details
UPI uses Virtual Payment Addresses (VPAs) instead of bank account numbers and IFSC codes, enhancing privacy and reducing the chances of entering incorrect details.
Interoperability
UPI is supported by multiple banks and financial institutions, ensuring that users can transact with anyone, regardless of their bank.
Low transaction costs
UPI transactions typically have minimal or no transaction fees, making them cost-effective for users.
Trackable transactions
Users can easily track their transaction history and account balance through the UPI app, enhancing transparency and control over finances.
Encourages cashless transactions
UPI promotes a cashless economy, reducing the use of physical currency and contributing to digital financial inclusion.
Government initiatives
UPI is supported by government initiatives such as BHIM, which further promote its adoption.
Real-time scale
UPI is among the world's largest real-time payment systems, processing billions of transactions annually.
Free for individuals
Person-to-person bank-to-bank UPI transfers are generally free for individual users, making digital payments more accessible.
How does UPI work? Step-by-step UPI transaction process
UPI simplifies digital payments in India. Users download the app, link their bank account, and create a Virtual Payment Address (VPA). They can send money, request payments, pay bills, and recharge phones within the app. Transactions are secured with UPI PIN authentication, and the app handles the processing with the banks.
Register on a UPI-enabled app and link your bank account.
Create a VPA and set a secure UPI PIN.
Initiate a transaction using a VPA, mobile number, or QR code.
Authenticate the transaction using your UPI PIN.
NPCI routes the request between the payer and beneficiary banks.
Both parties receive instant transaction confirmation.
Participants involved in a UPI transaction
The following entities play an important role in every UPI transaction:
Remitter Bank: The payer's bank that initiates and debits the transaction amount.
Beneficiary Bank: The recipient's bank that receives and credits the funds.
NPCI: The governing body that manages and routes UPI transactions.
Payment Service Providers (PSPs): UPI applications that facilitate transactions between users and banks.
Merchants: Businesses that accept UPI payments through QR codes or VPAs.
Bank Account Holders: Individuals or organisations sending and receiving money through UPI.
UPI transaction limit per day 2026: How much can you send?
The UPI transaction limit depends on NPCI guidelines and individual bank policies.
Transaction Type | Typical Limit* |
Standard Person-to-Person (P2P) | Up to Rs. 1,00,000 per day |
Selected Merchant Categories | Higher limits as permitted |
UPI 123Pay Transactions | As per NPCI guidelines |
New User Transactions | Bank-specific restrictions may apply |
*Please verify the latest limits with your bank and NPCI guidelines.
How to transfer money through Bajaj Pay UPI (step-by-step)
You can send money through Bajaj Pay UPI in a few simple steps:
Log in to the Bajaj Finance app and locate the UPI section.
Tap ‘SEND MONEY’.
Choose who you want to send money to.
Enter the amount.
Pick the bank account to send from.
Add a note if required.
Check the details and confirm.
Use your PIN or fingerprint to authorise the transaction.
You will receive a confirmation once the transaction is completed.
How to find & create your Bajaj Pay UPI ID
To find your Bajaj Pay UPI ID:
Open the Bajaj Finance application.
Sign in using your registered mobile number.
Navigate to the profile or account settings section.
Select the ‘UPI ID’ or ‘MY UPI’ option.
Your UPI ID will be displayed on the screen.
If you need assistance, contact customer support.
How to generate or reset your Bajaj Pay UPI PIN
A UPI PIN is a confidential 4 or 6-digit code used to authorise UPI transactions securely.
Open the Bajaj Pay UPI application.
Sign in to your account.
Go to the settings or profile section.
Select ‘MANAGE UPI PIN’.
Choose the linked bank account.
Follow the instructions to generate or reset your PIN.
Complete authentication as required.
Confirm the process.
Your new UPI PIN will be activated after successful verification.
UPI vs IMPS vs NEFT vs RTGS: Key differences
UPI, IMPS, NEFT, and RTGS are popular digital payment methods, but they differ in speed, limits, and usage.
Method | Speed | Typical Limit | Best For |
UPI | Instant, 24/7 | Bank-defined | Everyday payments |
IMPS | Instant, 24/7 | Bank-defined | Immediate transfers |
NEFT | Near real-time | Bank-defined | Routine transfers |
RTGS | Real-time | High-value transfers | Large transactions |
UPI offers the advantage of using a VPA or QR code instead of account numbers and IFSC codes.
Is UPI safe? UPI security features
Yes, UPI is considered a secure payment system. It uses multiple security measures to protect users and transactions:
Two-factor authentication for every transaction.
UPI PIN-based approval.
Device and mobile number verification.
Virtual Payment Address instead of sharing bank details.
Transaction monitoring and dispute-resolution mechanisms.
Transaction limits that help reduce potential risks.
Users should never share their UPI PIN or OTP with anyone.
What is UPI 2.0? New features
UPI 2.0 is an enhanced version of the UPI ecosystem that introduced additional features and flexibility.
Key features include:
Linking overdraft accounts.
One-time mandates and AutoPay facilities.
Signed intent and QR-based payments.
Support for multiple bank accounts.
UPI Lite for small-value transactions.
These features improve convenience, security, and the overall user experience.
Conclusion
With the advent of UPI and platforms like Bajaj Pay UPI, financial transactions have become more streamlined and convenient. UPI offers a secure and efficient way to transfer funds and make payments using a mobile application. Bajaj Pay UPI provides a user-friendly experience for everyday payments.
UPI is a user-friendly digital payment platform in India. It offers instant fund transfers, strong security measures, and 24/7 accessibility. By simplifying payments and promoting cashless transactions, it supports digital financial inclusion and makes secure transactions more accessible.
Bajaj Finance app for all your financial needs and goals
Trusted by 50 million+ customers in India, Bajaj Finance App is a one-stop solution for all your financial needs and goals.
You can use the Bajaj Finance App to:
- Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
- Invest in fixed deposits and mutual funds on the app.
- Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
- Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
- Apply for Insta EMI Card and get a pre-qualified limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
- Shop from over 100+ brand partners that offer a diverse range of products and services.
- Use specialised tools like EMI calculators, SIP Calculators
- Check your credit score, download loan statements and even get quick customer support—all on the app.
Download the Bajaj Finance App today and experience the convenience of managing your finances on one app.
Frequently asked questions
UPI full form is Unified Payments Interface, a real-time payment system developed by NPCI that enables instant bank-to-bank transfers using mobile applications and Virtual Payment Addresses.
Yes, UPI is considered safe because it uses multiple security layers, including device authentication, bank verification, and UPI PIN authorisation for every transaction.
Users can access UPI services through various UPI-enabled applications offered by banks and payment service providers that support NPCI's UPI framework.
UPI full form in banking is Unified Payments Interface. Developed by NPCI and launched in 2016, it enables real-time bank-to-bank fund transfers through mobile applications using a Virtual Payment Address (VPA).
The standard UPI transaction limit is generally up to Rs. 1,00,000 per day. Certain merchant categories may have higher limits, while individual banks can apply lower limits based on their internal policies.
UPI works by linking your bank account to a mobile app. You create a VPA and UPI PIN, enter recipient details or scan a QR code, and authorise the payment for instant money transfer.
UPI lets users transfer money using a VPA or QR code, while IMPS generally requires the recipient's bank account number and IFSC code. Both offer instant transfers, but UPI provides a simpler payment experience.
No, person-to-person bank-to-bank UPI transactions are generally free for users. However, certain wallet-based or merchant-related transactions may attract charges as per applicable regulations and service provider policies.
