If we want to use upi for payment transfer from one bank to other ,we have register on any upi based app i.e. third party app like Google Pay , Paytm or many more .

How does UPI work?

UPI has made the money transfer process a lot easier. You do not have to remember the receiver’s account number, account type, IFSC, and bank name. Instead, you can do the money transfer only by knowing their Aadhaar number, mobile phone number registered with the bank account, or UPI ID. You can set up UPI ID on one of the apps that support UPI service. Mostly, a UPI ID begins with your mobile number followed by ‘@’ symbol and ends with the app you are using. For example, if your mobile number is 90xxxxxx60 and if you are using Paytm app, the UPI ID can be ‘90xxxxxx60@paytm’. The ID can be set up by providing the details of your bank account on the app. The app will send an OTP to your registered mobile number to make sure that you are an authorised person. Once you enter the OTP, you will be prompted to create a PIN for the UPI ID. Upon completing the registration, you can choose any mobile number from your contacts and send money.

UPI works on a common layer or a unified interface developed and hosted by NPCI. This common layer orchestrates transactions and ensures settlement across bank accounts using IMPS and Aadhaar Enabled Payment System (AEPS). Banks, financial institutions and other entities that provide UPI services connect to the NPCI’s unified interface through standard APIs to enable trans-actions from Virtual Payment Address avoiding the need to share account de-tails or credentials. In UPI solution, payment authentication and authorization are always done using personal phone. Since this layer offers a unified interface, any-to-any interoperable payments can be accomplished using standard set of APIs.17

All APIs are exposed as stateless service over HTTPS using XML input and output and all entities consuming UPI services must ensure idempotent behavior for all APIs. These APIs are asynchronous in nature meaning once the re-quest is sent, response is sent back separately via corresponding response API.

This allows the response to API call to return to the caller immediately after queuing the request. All request-response correlation must be done via the transaction ID set by the originating point. Callers are expected to call the API with a unique transaction ID for which response is sent via a response API ex-posed by the caller. This allows same APIs to be used for instant payment as well as delayed payments. This also allows APIs to scale without having to wait in a blocking mode.