UPI: how India built the world’s largest instant payment system
About UPI
The Unified Payments Interface (UPI) is a popular Indian instant payment system that leads globally in the number of processed transactions. It was developed in 2016 by the Reserve Bank of India (RBI) in collaboration with the National Payments Corporation of India (NPCI).
UPI is positioned as a universal digital financial platform that connects more than 600 banks in India and abroad.
As of 2025, UPI processes over 13 billion transactions monthly, including cashless payments and transfers in Indian rupees (INR). Analysts estimate that UPI accounts for more than 70% of all transactions made by Indian users.
In 2025 alone, the number of transactions using QR codes (two-dimensional barcodes) grew by over 90%. UPI has become so widespread that it is displacing networks like Visa and Mastercard in the Indian market. According to forecasts, by 2027–2028, at least 90% of all cashless transactions in India will be processed through UPI.
UPI is also available outside India. In recent years, countries such as France, Singapore, Saudi Arabia, the UAE, the Maldives, Bhutan, Bahrain, and Oman have joined the system.
Creating and using a UPI wallet
Setting up a UPI wallet is relatively simple, but users must have an account with at least one bank that supports transactions in Indian rupees (INR).
To get started, users need to download and install an official UPI app, create an account, link one or more bank accounts, and obtain a unique Virtual Payment Address (VPA), also known as a UPI ID, to receive transfers.
Users can create their own payment address or use one suggested by the service.
To send money, you only need to enter the amount and the recipient's UPI ID or bank account number, even if it is not linked to a UPI wallet.
UPI also allows transfers via integrated identifiers such as Aadhaar*, used by more than 1.3 billion residents of India. Payments can also be made using QR codes received from another user or a merchant. Each user can generate their own QR code within the app.
* Aadhaar (from "foundation") is a unique 12-digit identification number issued by the Unique Identification Authority of India (UIDAI) to Indian residents and used for identity verification in government and financial services.
Services in INR and platform features
In addition to standard bank transfers and payments for goods and services, UPI supports:
- Bill payments (utilities, mobile services, internet)
- Microloans and credit card payments
- Insurance premiums and taxes
- Investments, including insurance funds
- International payments and transfers
One of UPI's key features is the ability to manage multiple bank accounts within a single app, which has contributed significantly to its popularity.
Another important feature is that UPI is designed exclusively for transactions in Indian rupees (INR) and does not support other currencies.
The platform is widely used not only for peer-to-peer transfers but also by merchants, enabling them to accept payments quickly and with minimal fees. By early 2025, more than 10 million merchants were using UPI.
Fees and limits
UPI fees differ for individuals and merchants:
- Individuals: 0% fee for transfers
- Merchants: typically 0.5% to 1.1% per transaction
Daily transaction limits for individuals range from ₹100,000 ($1,063) to ₹500,000 ($5,316), depending on the transaction type:
- Standard transfers: up to ₹100,000 per day
- Credit card payments: up to ₹6,000,000 ($63,797)
- Investments: up to ₹10,000,000 ($106,329)
There are also per-transaction limits ranging from ₹100,000 to ₹500,000.
While bank transfers are free for users, fees may apply when using third-party digital wallets due to data exchange charges. Additional fees may also apply to payments for utilities, telecom services, fuel, goods, insurance services, and government payments.