A person who is about to use an online payment system will go for a Unified payment interface but what about the seniors in the online payment system, will they go for UPI or wallet money? According to recent research, UPI will grow to take up about 59 % of payment transactions by 2025. It is not surprising that 2.3 billion transactions were made using UPI as of February this year. This is clear proof that UPI is dethroning other forms of online payment transactions wallets and digital cards. What is the reason for this shift and how is the UPI payment system better than wallets? Let us find the answers in this post.
What is a mobile wallet and UPI?
Like the name says it all, a mobile wallet is a digital form of wallet in which one can store money and use it to purchase goods and services. One can install their favorite app and enter their details and money can be added to the wallet.
The Unified Payment interface on the other hand allows fund transfer between banks via smartphone without having to enter card details or adding money every time a purchase is made. UPI allows direct transfer of money between accounts without entering the account details of the beneficiary.
Simple to use
The main reason for UPI’s pick-up is that it is easy to use. Peer-to-peer transactions don’t require multiple steps. While a mobile wallet, on the other hand, involves multiple legs like adding money to the wallet from the bank account and then transferring it to the beneficiary. This can be easy for the new generation of smartphone users but not for everyone.
Identity of account
In the case of a mobile wallet or e-wallet, a mobile number acts as the entity of identification for the user’s account. The identity of the sender and receiver can be confirmed before the transaction by the wallet application. Contrary to the wallet, UPI payment uses a virtual payment address.
Improved adoption
Most mobile wallet companies opt for the UPI platform. This paints a picture of UPI’s popularity. Daily, the consumer uses different methods for different transactions. For instance, a person will use UPI to provide a salary while the same person may use the wallet to pay for fuel. With the launch of UPI, top providers like Google launched their apps and paved the way for increased use of UPI. The diversification of UPI helped people address the skepticism they had about e-wallets.
No KYC
Another great obstacle that e-wallets users face is the compulsory requirement of KYC for all customers. As the regulatory requirement began in March, the value of e-wallet transactions fell by 30 percent. On the other hand, UPI doesn’t require KYC as of now. Though a large population of wallet users has completed their KYC, it remains to be a challenge.
Interoperability
The interoperability of mobile wallets remains one of the major constraints. The sender and receiver should be registered with the same wallet app for the wallet-to-wallet transfer. For instance, if the sender has a Paytm wallet, the receiver should also have a Paytm wallet to receive money. Contrarily, UPI supports interoperability irrespective of the banks both have.
Benefits:
- Immediate money transfer through mobile device around the clock 24*7 & 365 days.
- Merchant payments with a single application.
- Utility Bill Payment, over the counter payment, Barcode (scan and pay) based payments.
- Donations, Collections, Disbursements scalable.
- Seamless single click payment.
- Raising complaints from mobile applications directly.
- Virtual address of the customer for pull and push provides for incremental security with the customer not required to enter the details such as card no, A/C no, ISFC, etc.
UPI supports Non – Financial transaction also:
- It is beneficial to Banks, Individuals as well as Merchants.
Finacus UPI solution
Finacus provides a top-notch UPI platform with an API interface. It also connects UPI with the universal mobile interface. Our UPI solution is filled with features that will benefit the organization and the customer. Presently 46 Banks are using our UPI platform and we process 5.5 crore transactions per month.
Get your UPI interface today from Finacus, the best UPI solution provider to extend your banking service to the next level. Please ask for a demo experience of how well the UPI solution works.