The recent surge in the usage of e-wallets can be attributed to the fact that being a digital platform they have made transfer of money from one person to another quite an easy job.
The recent surge in the usage of e-wallets can be attributed to the fact that being a digital platform they have made transfer of money from one person to another quite an easy job. The process of assigning money is easy and requires only a few authentication checks.
Right from the public and private banks to private companies, RBI with its vision of ‘digital India’ is becoming very liberal in channelizing the fund transfer policy at different levels. UPI is an initiative taken by RBI’s NPCI whereas e-wallet is an initiative taken by private companies, followed by banks. However, can the initiative taken by the government of launching UPI will replace e-wallets? It’s only a matter of ranging thoughts to an extent. But now it’s for the people to decide what will really ease their way of doing financial transactions in the future.
Let us take a look at the various features of UPI and e-wallets:
UPI comes up with the flexibility where you can choose to download the UPI application from any of the banks’ UPI app like SBI UPI, Axis UPI, HDFC UPI, etc. You can make multiple virtual addresses for doing various payments in different e-commerce websites while e-wallets are taut within the usage of the same app between individuals. For instance, you can transfer money from one ICICI pocket to another ICICI pocket or if the person is using MobiKwiK app, then the person has to download and authenticate the application to get the money transferred.
Currently, to initiate any transaction through UPI you need to have an internet connection while transactions can be done with or without the internet through e-wallets. Later on, UPI may also come up with its non-internet transfer of funds facility.
In UPI the maximum transaction limit is fixed at Rs.1 lakh, which may further be increased by the Central government, while in e-wallets KYC customers can make transactions up to Rs.10000 per day. In UPI transfer of funds can be done through various channels like Aadhaar number, virtual payment address (VPA), account transfer through IFSC and even through registered mobile number. On the other hand, e-wallets require the same app to be installed in another phone to transfer the funds.
Also, UPI is not charging any transaction fee while e-wallets are charging 1% of the transactional cost when the amount is transferred from e-wallet to banks. No charges are deducted from e-wallet to e-wallet transfer and from bank to e-wallet transfer. However, minimal charges of 50 paise per transaction will get deducted from UPI in the near term. The decision of applying charges per transaction is yet to be taken by the Central bank.
UPI is well equipped with payment system player (PSP). Multiple accounts of the same bank and the different bank can be linked through a single UPI application. On the other hand, multiple wallets cannot be linked with each other. Moreover, transferring of money through credit card or debit card towards a wallet requires a third party gateway authentication.
UPI has also come up with the variant feature of ‘collect’ where you have the option to receive instant payments or on a pre-defined date whenever you want the money in your account, while e-wallets give you only an instant payment transfer facility.