In the last few years, Unified Payment Interfaces (UPIs) and digital wallets have emerged as the most popular digital payment options. These aspire to provide effective and reliable means of exchange, facilitating seamless digital transactions. The UPI enables immediate financial transfers between banks using the upi application. It serves as a link between customers to make transactions easily without involving lengthy account transaction procedures. Understanding the difference between UPI and digital wallets is important to maximize the use of digital transactions.
What is a Digital Wallet?
Digital wallets are software that makes digital payments. This software securely stores information on credit cards and debit cards, and hence, this eliminates the need to carry a physical card. It allows individuals to make bill payments, electronic transactions, mobile recharge, and movie/travel booking. It can also be used to transfer money from one bank account to another, providing security and convenience alternatives to physical payment. The main aim of digital wallets is to digitally transform physical money to make online transactions.
What is a Unified Payment Interface?
These days Unified Payment Interface (UPI) becomes the most popular digital payment method developed by National Payment Corporation of India (NPCI). UPI applications made transactions much easier for account holders. To money transfer app through upi application, the sender and the receiver must have a unique UPI ID. As digital transactions evolve rapidly nowadays, most UPI apps allow users to transfer money by entering the receiver’s name in the contact list or their mobile number. On the other hand, users must set a four or 6-digit UPI PIN for transactions.
Difference between Digital wallet and UPI
- Transfer Process:The Unified Payment Interface is a real-time payment system that was developed by (NPCI). It enables direct transfer of money from one account to another instantly. But in digital wallets, the money is first transferred from the bank account to the wallet and to the beneficiary account.
- Transaction Limit:The UPI application allows users to transfer up to 1 lakh per transaction. On the other hand, in digital wallets, the transaction is limited to 10,000 per month for non-KYC customers, and for KYC customers, the transaction limit is 20,000 per month.
- Interoperability: In the case of digital wallets, the sender and the receiver must have the same digital wallet app to make transactions. On the other hand, UPI transactions take place between two bank accounts, irrespective of the UPI app used to make transactions.
- Cashback and vouchers: Digital wallet encourages usage by providing Cashback and vouchers. Nowadays, UPI is also becoming part of a loyalty program through different digital platforms, but it still does not offer as much as digital wallets do.
Wrapping it up:
UPI and digital wallets are two essential pillars supporting Indi’s digital payment revolution, each providing advantages and features. Understanding the differences between the Unified Payment Interfaces in mobile banking app and digital wallets is important for maximizing their potential and advancing the country toward a more inclusive, cashless future as India embraces the digital era.
