UPI: Anatomy of a Payment Transaction

The piece breaks down the internal workflow of a UPI payment transaction. It explains the roles of the payer, payee, and their respective banks. The article describes how the UPI platform routes the transaction request. It details the authentication steps required before funds are moved. The flow includes verification of the virtual payment address. It outlines how settlement occurs between participating banks. The analysis highlights the speed and security features of UPI. It concludes with observations on the system’s impact on digital payments in India.