I was able to do transaction using HDFC UPI.
HDFC has integrated UPI into their main app (no seperate app for UPI). HDFC has published guidelines to create UPI address from their app. I was able to create UPA within 1 minute, and also able to transfer money (tested with Rs 10) to friends UPI account on ICICI within few seconds (in just 1-2 seconds we both got sms about money sent and received). It was indeed very simple and fast process.
Before BHIM was launched, few people had even heard about UPI/VPA even though it had existed for many months. But now a lot of people have BHIM or some other app installed so this can actually work. Paytm gained because government took its own sweet time to push UPI as an option.
But the problem remains... Paytm became popular because it enabled acceptance of payments of Rs. 20,000 per month in a non-kyc account. Retailers could buy 10 sims and accept 2L per month. With UPI, there is no easy way to save tax on the funds collected.
Though I am not sure how one can convert the funds collected in Paytm as cash. There must be ways. One cannot just use them to pay for stuff alone.