UPI has kicked in surpassing NEFT and IMPS in transaction volume. We, at Cashfree, have always believed in UPI as a paradigm shift in payments in India.

We did a story on UPI growth trend. Check it out here.

As we began exploring the momentous potential of the technology, we partnered with GooglePay, PhonePe, BHIM App to offer UPI for faster checkouts on Cashfree payment gateway but there was definitely more to it.

To unleash the power of UPI we introduced Virtual UPI IDs.

Cashfree launches Virtual UPI IDs for easy reconciliation

Virtual Bank Accounts to Virtual UPI IDs

In 2016, we rolled out autocollect-a smart cash management solution that uses virtual bank accounts to accept and reconcile NEFT/RTGS/IMPS transfers.

Virtual bank accounts are pass-through accounts linked to a real bank account identified by a unique virtual account number (instead of bank a/c no. & IFSC).

Cashfree customers like Milaap, India’s largest crowdfunding platform, generate virtual banks accounts for each donation/funding drive and track the campaign payments easily.

The idea of virtual accounts for easy collection and reconciliation had been already validated, when we saw UPI surpassing the traditional modes, we wanted to facilitate easy reconciliation for UPI payments as well.

Virtual UPI IDs -How it works?

Let take a fictional example of a school say DPS.

DPS’s every branch has 100s and 1000s of students. Every month, the school receives payments against tuition fee. The inbound payment needs to be matched with each student to track which student has made the payment.

It takes over a week at times for the accounts team of schools to manually reconcile payments. This problem of payment collection and reconciliation can be resolved using Virtual UPI IDs.

Let’s see how Virtual UPI IDs work.

  • School generates unique virtual UPI IDs for each student based on roll no. for eg for a student named Rohit Sharma, Class 9, section A, roll number 01, a unique VPA can be created 9A01@okaxis.
upi accept payment via google pay
  • School notifies students via email/SMS/WhatsApp or App notification
  • Student pays to the assigned virtual account using GooglePay, BHIM, Paytm, Whatsapp or any other UPI App
  • Once the payment is received school gets instantly notified about the transaction and payment details via a webhook.

Virtual UPI IDs for all type of payments

Virtual UPI payments can be used for both B2B & B2C payments. Some popular use cases include utility bills, loan repayment, payment collection from retailers by wholesalers etc

These payments can be in nature of

  • One time payments
  • Repeat payments ( where dedicated virtual accounts is used for each customer) and
  • Campaign based payments.

As UPI becomes the norm, payment collection can become more efficient using the Virtual UPI IDs. With almost every user carrying a smartphone, it is now easier than ever before to make payments using UPI based solutions.

Apart from dedicated UPI apps, other mobile apps such as Uber are also adding UPI as a payment mode. Most recent is Whatsapp which is rolling out WhatsApp payments feature for its 200 million active user base in the country.

Whatsapp Payments: Payment flow

Step 1: Merchant defines a custom VPA  ( using API multiple unique VPAs can be generated against each invoice/customer or campaign).

An email with the virtual UPI ID can also be triggered via Cashfree. The merchant may also share the Virtual UPI ID with the customer as a WhatsApp message or attached with invoice over email or SMS.

Step 2: Customer opens Whatsapp settings> payments > New payments> Selects “To UPI ID”


Step 3: The customer enters the id> enters the amount> enter UPI PIN, once transaction is successful, customer gets message.


Step 4: Merchant gets notified of payment and the payment is automatically mapped with the paying customer.

We have seen businesses of all sizes use Whatsapp for business communication ( think about your flight invoice being delivered on your WhatsApp messenger). With WhatsApp messages already encrypted, payments are likely to get adequate security. As Whatsapp UPI payments pick up, we can expect more businesses to use Virtual UPI IDs to accept and reconcile such payments.

Looking for easy bill & fees collection?
Generate Virtual UPI IDs & accept payments via WhatsApp, GooglePay & BHIM. Receive money on same day.
Contact Us
Looking for easy bill & fees collection?
Generate Virtual UPI IDs & accept payments via WhatsApp, GooglePay & BHIM. Receive money on same day.
Contact Us

Easy reconciliation for Google Pay payments

GooglePay is one of the most popular UPI apps. Using Cashfree Autocollect Virtual UPI IDs, a merchant can easily collect payments and auto-reconcile the payments.

The steps to create the unique virtual UPI ID remains same.

Payment flow

  1. Merchant defines a custom VPA  ( using API multiple dynamic VPA can be generated against each invoice/customer).


Shares Virtual UPI ID with the customer (details can be mentioned on the invoice/merchant can also send a push notification, if a application is used).

2. Customer opens GooglePay App> taps on New> UPI ID OR QR


3. Selects UPI ID> enters VPA> verifies & then clicks on Pay.


4. Customer enters the amount and pays. As soon as the payment is successful, the customer gets transaction completion message and merchants also get notified.


Until now, UPI has been used mostly for small ticket size transactions. With the provision of automated reconciliation through virtual UPI IDs, a growing number of business will start to offer UPI payment option. The usage of virtual UPI IDs means ease of payment for customer, while  merchant gets better visibility of payment collection status which helps in effective cash flow management.

About Cashfree Autocollect

Cashfree Autocollect is an advanced cash management services that help businesses match inbound payments to customers using Virtual bank accounts and Virtual UPI IDs. Used by businesses like Milaap, EarlySalary etc, more than 3 million virtual bank accounts and UPI IDs have been created by Cashfree merchants.

Looking for easy bill & fees collection?
Generate Virtual UPI IDs & accept payments via WhatsApp, GooglePay & BHIM. Receive money on same day.
Contact Us
Looking for easy bill & fees collection?
Generate Virtual UPI IDs & accept payments via WhatsApp, GooglePay & BHIM. Receive money on same day.
Contact Us