How UPI Apps Are Replacing The Wallets?

UPI or Unified Payments Interface is a revolutionary new payment system developed by the National Payments Corporation of India (NPCI) and the Unique Identification Authority of India (UIDAI). It is a fool-proof and secure system as the transactions are carried over in a highly encrypted format. It also comprises of Two Factor authentications. It uses an email-like virtual payment address (VPA) instead of a bank account number or any other detail. The person uses a mobile banking personal identification number (MPIN) to authorize payment.

UPI App is a fast, secure and safe payment system which is getting more and more popular than the mobile wallets. In fact, UPI is fast replacing wallets for a number of advantages that it scores over wallets.

How UPI scores over the Wallets

a) UPI can send and receive money without wallet limits : Mobile wallets can be used to transfer only a small amount of money, whereas UPI is like operating a bank account. Moreover, UPI requires just a virtual payment address to be given to others, thus sensitive information are not required to be shared. So it is the most preferred means of sending and receiving payments.

b) No loss of Interest or money parking requirements : Unlike wallets, in UPI one need not park any money to pay. Thus the money remains in the bank account till the actual payments and continues to earn interest. Moreover, to sweep back the money in your bank account again, the mobile wallets charge exorbitant service charges.

c) No interoperability in mobile wallets: The biggest problems with mobile wallets is that you have to have the same wallet that the merchant has.  It is not feasible or practical to have every mobile wallet app in the smartphones and to load money in all the wallets. Moreover, it pinches hard that the money loaded in the wallets ceases to earn any interest.

Apart from these major reasons there are many more limitations that restrict the use of mobile wallets. UPI on the other hand, does not suffer from these limitations and disadvantages. UPI is just like operating one’s bank account with all the conveniences, in a mobile phone, but with much more safety and security.