A UPI ID is a unique identifier used in the Unified Payments Interface (UPI) system, which facilitates instant money transfers between bank accounts in India. It typically consists of a username followed by a domain, such as "@bankname," making it easy for users to send and receive money without needing to share sensitive bank details. To use a UPI ID, individuals must link it to their bank accounts through a UPI-enabled app. This system allows for seamless transactions, bill payments, and online shopping, enhancing the convenience of digital payments in everyday life.