Virtual Payment Address (VPA): Functionality, Uses, & UPI Integration

Are you looking to navigate the digital payment space? You may have heard about UPI, but do you know what VPA stands for?

According to research, India recorded 14.04 billion UPI transactions in May 2024 alone. This shift to UPI payments makes having a virtual payment address (VPA) a necessity. 

VPA can be seen as your store or business’s digital payment name, which is easy to remember, secure to use, and perfect for sharing with your customers. Whether you are handling prepaid orders, daily business things, COD returns, etc., setting up VPA is important to collect payments smoothly.

In this blog, you will explore everything you need to know about VPA, from how it works to how easily it can speed up your payments.

What is VPA

Virtual Payment Address is a unique ID used for UPI payments throughout India. It provides a secure and instant fund transfer between bank accounts, without the need to share any bank details like, bank account number, branch name, IFSC code separately while doing a transaction. 

VPA is a simple payment collection method for customers. Instead of handling cash and sharing your complicated bank account details, you can share your VPA and instantly receive payments. It is particularly useful, especially in eCommerce, for Cash on Delivery, order returns, and other related applications.

VPA Structure Explained

A VPA (Virtual Payment Address) is based on a simple formula that is easy to understand and use for everyone. The format of the VPA includes username@yourbankname.

The username is a customised name, as it can be your store name, phone number, or even your name. The bank name is the handle of the bank or app that you are using for UPI.

What are the Steps to Choose and Set Up Your VPA

Setting up a virtual payment address is quick, but it’s essential to choose the right one, as it can significantly impact how easily your customers remember you and trust your brand. Follow the following steps to create a VPA.

• Choose a trusted UPI-enabled app like PhonePe, Paytm, BHIM, or your bank’s official app.
• Register in the app using your mobile number linked to your bank account.
• Ensure that you choose a VPA that is business account-friendly, as it will reflect your brand and store name. Try to avoid adding any random numbers, names, or personal references to make it look professional.
• Choose a bank account of your choice to link with your VPA UPI ID to receive payments into your account.
• Set up your UPI PIN now! The app will ask you to create or enter your UPI PIN to authorise your transactions. Make sure to keep this PIN secure and private.
• Before sharing the VPA with customers, test it to ensure it works smoothly.
• Once your VPN UPI ID is active, integrate your VPA on invoices, websites, product packaging, social media, and other relevant platforms to streamline customer payments.

Different VPA Formats Used by UPI Apps

Each UPI app has its Virtual Payment Address (VPA) with a unique suffix. While the base ideas are the same, the format of each can be seen as slightly different. 

Some of the commonly used formats are:

What are the Benefits of VPA?

A VPA acts as a unique ID for your UPI transactions. It eliminates the need to share your bank account details every time you want to receive payment. These virtual payment addresses are designed to facilitate speedy and secure payments. 

Other benefits of VPA include:

• VPAs are easy to remember, which also reduces the risk of wrong account entries or failed payments.
• Whether you are receiving payments from customers or paying someone, the process of paying happens in real-time, 24/7.
• The VPA works across all UPI apps and banks, providing you with a consistent payment address, regardless of which platform you or your customers use.
• Using a VPA also shows your brand or store name, which adds to professionalism and builds trust with buyers.

Are There Daily and Per-Transaction Limits in UPI?

UPI has certain limits set by the National Payments Corporation of India (NPCI) to ensure smooth and secure transactions. This includes:

• For per-transaction limits, most of the UPI apps allow you to do Rs. 1 lakh per transaction. However, this can vary depending on the bank or app.
• The daily limit for UPI is also Rs 1 lakh, and you can do up to 10 transactions per day through UPI, depending on your bank or your account type.
• As a seller, some banks or apps may offer you higher limits, such as Rs 5 lakhs per day. It all depends on the verification and agreement with the bank.

What is UPI AutoPay and How Does it Work?

UPI AutoPay is a feature introduced by NPCI (National Payments Corporation of India) which allows you to automate any recurring payments using UPI. 

Whether it’s your monthly payments, bills, or EMIs, UPI AutoPay helps you to schedule these payments in advance while making sure that they are processed automatically as per the due date.

How Does UPI AutoPay Work?

• You can set up or offer a UPI AutoPay option at the checkout.
• The customer must approve a subscription by adding a UPI PIN for the one-time authentication process, as the PIN won’t be requested repeatedly.
• Once approved, the amount will be automatically deducted from the customer’s account on the specified date each month, without requiring any manual action.
• Customers will have the option to pause, cancel, or check autopay anytime from the UPI app.

Key Benefits of Using Virtual Payment Address in UPI

Some of the significant benefits include:

• Convenient: It allows you to receive payments conveniently from the comfort of your home or place by just sharing your VPA. 
• Secure process: VPA secures and hides your actual bank details while reducing fraud risks. Additionally, every payment is authorised by UPI PIN by adding an extra layer of protection.
• Zero setup costs: You don’t need to pay anything to create or use VPA, as it is budget-friendly for all types of sellers.
• Widely accepted: From Google Pay to BHIM to Paytm, your customers can use any UPI app or bank to pay you using your VPA.
• User-friendly: Setting up and creating VPA only takes minutes, even for first-time users. It simplifies payments and increases customers’ trust in you.
• 24/7 accessibility: It is accessible at any time of the day or year, as you can accept or make payments from anywhere.

How can Shiprocket Checkout help with Enabling Seamless UPI VPA Payments 

Shiprocket Checkout makes it easy for you to integrate or use UPI VPA ID for your online store or business payments. It helps you simplify the payment process for your customers while increasing your conversion rate.

• Shiprocket makes sure to provide you with a secure and PCI-DSS-compliant UPI payment process. 
• We have an encrypted way that complies with strict regulations to prevent any fraud.
• Provides a direct UPI VPA payment option at the checkout page, too. Customers can use it by entering their VPA and approving the request on their UPI app.
• Have a fast payment authorisation process, which includes putting a UPI PIN only on the app.
• We provide a single platform for all aspects, including order placement, shipping, and delivery.

Conclusion

Convenience and speed are important today, as they define customers’ experiences, and having a virtual payment address (VPA) is not optional; it is essential. 

Whether you are a small business owner or have an online or offline store, using VPA for UPI payments will simplify how you receive payments, keep your transactions secure, and build trust.

So, get ready to give your customers a smoother payment experience with VPA today! It will make your payment process as seamless as your checkout process.

Make sure to explore Shiprocket Checkout to effortlessly integrate VPA into your business with smarter, faster, and more secure payments!