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CS Professional · Artificial Intelligence, Data Analytics and Cyber Security - Laws and Practice · Internet and Other Technologies

Priya pays a shopkeeper by scanning a QR code and approving the payment with her UPI PIN in her banking app. Which statement about this transaction is correct?

UPI is an instant account-to-account transfer system where the payer authenticates using a private PIN and a virtual payment address. The PIN is not shared with the merchant, and the system works across different banks, unlike cheques or same-bank-only transfers.

  1. AFunds move only after both parties exchange physical cheques
  2. BThe UPI PIN is shared with the merchant so that the merchant can debit the account
  3. CThe payment is an instant account-to-account transfer authenticated by the payer's PIN through a virtual payment addressCorrect
  4. DUPI works only between accounts held in the same bank

Explanation

UPI enables real-time interbank transfers using a virtual payment address and the payer authenticates with a private PIN. The PIN is never shared with the merchant, and UPI is interoperable across banks, so the other options are wrong.

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