To understand the end-to-end digital payment process using UPI, you must be familiar with various terms used to refer to the key entities that participate in this process. This page lists these entities and describes their roles in a UPI transaction.
Also referred to colloquially as the "bene" bank, the beneficiary bank is the bank that owns the account that a payment is credited into. This designation varies in each transaction, so a beneficiary bank in one transaction could be a remitter bank in another transaction.
Core Banking Systems (CBS)
Software services operated and used by banks for managing their core banking operations.
The bank that owns an entity's bank account. An entity can be either an individual person or an organization (referred to as a merchant). The issuer bank handles all the debit and credit transactions into a bank account. The issuer bank also provides other services such as:
- Associating an account with a mobile number or Aadhaar number
- Providing security features such as debit card PIN validation and support for one-time-passwords (OTP) via text messages, and so on.
Mobile Personal Identification Number (M-PIN)
A four-digit or six-digit numeric password used by an end-user to authenticate all transactions that involve a debit or balance check of their bank account.
One Time Password (OTP)
A numeric token sent via SMS to a user's phone as part of multi-factor authentication. This is typically used when a user registers their bank account with UPI the first time, or when the user wishes to reset their M-PIN.
Also referred to colloquially as the "remi" bank, the remitter bank is the bank that owns the account that a payment is debited from. This designation varies in each transaction, so a remitter bank in one transaction could be a beneficiary bank in another transaction.
Virtual Payment Address (VPA)
A unique ID assigned by the acquirer bank to every entity registered with the acquirer bank and participating in the UPI ecosystem. A VPA is generally structured like an email ID, where the first part of the ID signifies the entity's username and the second part of the ID identifies the acquirer bank. The use of VPAs allows payments to be made between entities without needing to exchange confidential information such as bank account details or mobile phone numbers.