Digital revolution in India has begun as more & more service providers are adopting advanced technologies to provide good customer experience. Banking industry is at the forefront of this adoption and unified payments interface (UPI) is one such highly advanced technology backed by government of India and Reserve bank of India to promote cashless economy.
UPI is a funds transfer technology which can be done via bank’s app on smartphone. Although such type of transfer already exists; the biggest differentiating factor is that the sender does not need receiver’s bank account details for sending the money. Only thing required is the virtual payment address. Read more on how to transfer money through UPI app.
There are many differences between UPI and NEFT/RTGS/IMPS as listed in the below table.
|1||Through which device transfer can be done||Only smartphone||Website and app||Website and app|
|2||Transfer speed||Instant||Time consuming. But is instant & real time in case of RTGS.||Instant|
|3||Can you send money abroad||No||Yes||Yes|
|4||Can you transfer money 24*7||Yes||Only RTGS||Yes|
|5||How complex are the transfer details||Very easy, requiring just virtual payment address||IFSC code is bank & branch specific and difficult to remember||Very easy|
|6||Can recurring billing be setup?||No||Yes||Yes|
|7||Time taken for new payee registration||No need to add payee||Takes minimum 30 minutes||Less time consuming|
|8||Are bank account details must for the transfer||No||Yes||Yes|
|9||Can you reject money received incorrectly||Yes||No such option available unless someone reported to the bank||No such option available|
|10||From where is the money credited/debited||From bank account||From bank account||From wallet|
|11||Is there any transfer charge||Yes. Rs. 0.50 per transaction||At least Rs. 2.50 & Rs. 5 for NEFT & IMPS respectively||No|
|12||Is smartphone must for transfer||Yes||No||No|
|13||Any money collection alert sent||Yes||No||No|
|14||Any payment approval alert received||Yes||No||No|
|15||Any interest received on the money kept||Yes||Yes||No|
|16||Payee registration time||Instant||Takes time||Instant|
|17||Can you use app of non-bank account for transaction||Yes||NA||NA|
|18||Any transfer limit||Yes. Rs. 1, 00,000||Rs. 10, 00,000||No|
|19||How many authentication details required||UPI app login & 4-6 digit M-PIN needed||Internet/mobile banking logins and OTP/transaction password/debit card grid||Internet/mobile banking logins and OTP/transaction password/debit card grid|
|20||Is OTP required for transfer||No||Yes||Yes|
|21||How easy is the beneficiary addition||Very easy, requiring just virtual payment address||Addition of bank account details and bank approval is needed before transfer||Very easy|
|22||Are beneficiary details needed||Only virtual ID is required||Pre-addition of details is needed||No|
|23||Does beneficiary addition require bank's approval||No||Yes||No|
|24||Is beneficiary addition mandatory||No||Yes||No|
|25||Any payment gateway involved during transfer||No||Yes||Yes|
|26||How many banks offer this payment method||21||Almost every bank in India offers this payment method||NA|
|27||Can you pay anyone with this payment method||No. As of now only an individual or merchant.||Anyone i.e. individual, merchants, various service providers||Anyone i.e. individual, merchants, various service providers|
|28||Can you do eCommerce transactions||No||Yes||Yes|
As you can see above it is a very customer centric technology. UPI is certainly a game changer in India’s banking history similar to what ATM was during its beginning. As of now, only banks are allowed to integrate UPI in their apps. However as more and more people start using this technology, UPIs would be scaled up and mobile wallets will also be allowed to integrate it in their apps. As of now, 160 merchants have implemented UPI in their systems.
It is estimated that over 1 million transactions will be done by UPI by the year end i.e. by March 2017. And IMPS and UPI combined the figures is expected to cross 1.2 million transactions.