What Is a UPI Switch? How Banks and Fintechs Connect to UPI

Who takes part in a UPI payment

• NPCI, which runs the UPI network and switches transactions between banks.
• The payer's bank (issuer), which debits the customer's account.
• The payee's bank (acquirer), which credits the merchant or receiver.
• The payment service provider (PSP) bank behind each UPI app.
• Third-party app providers, which build UPI apps on top of a PSP bank.

What a UPI switch does

• Connects securely to NPCI and to the bank's core banking system.
• Processes pay, collect, mandate and QR transactions.
• Manages UPI IDs, account linking and customer authentication flows.
• Handles reversals, disputes and reconciliation files.
• Monitors performance so success rates stay high at peak load.

Who needs a UPI switch

Banks, including cooperative and small finance banks, need a UPI switch to let their customers send and receive UPI payments. Payment providers and fintechs that issue UPI handles or acquire UPI payments for merchants also rely on one, either their own or a partner bank's.

What to look for in a UPI switch provider

• Proven integration with NPCI and common core banking systems.
• Support for both issuing and acquiring flows, including QR and AutoPay mandates.
• Capacity to handle peak volumes without failures.
• Clear dispute, reversal and reconciliation tools.
• Security, audit logs and compliance with NPCI and RBI requirements.

Frequently asked questions