UPI (Unified Payments Interface)
UPIAn instant real-time payment system in India developed by NPCI, allowing peer-to-peer and merchant transactions directly from bank accounts via mobile devices using addresses called Virtual Payment Addresses.
Unified Payments Interface (UPI) is India's open, interoperable real-time payment rail, launched by the National Payments Corporation of India in 2016. It allows any UPI-enabled app on any participating bank to pay any other, addressed by a Virtual Payment Address (e.g. user@bank) or by a UPI ID, with settlement at the bank account level in seconds.
UPI's settlement model is multi-leg: customer-side debit, NPCI clearing, merchant-side credit. The merchant typically sees an aggregator settlement rather than a per-transaction credit, which means reconciliation between UPI capture reports and bank credits requires aggregation logic. UPI is mandated zero-MDR for merchants on PersonToMerchant (P2M) transactions per RBI policy, which simplifies fee reconciliation but does not eliminate it (some categories carry interchange).
UPI volume in India has scaled to multiple billions of transactions per month, making it the largest reconciliation surface for Indian merchants by transaction count. The combination of high volume, small per-transaction amounts, and aggregator-level bank settlement makes UPI reconciliation impractical without automation.