UPI has transformed India's payment systems by promoting a cashless economy. Its easy usage and linkage to bank accounts through mobile numbers and Aadhar has made this product a milestone in Indian Digital Public Infrastructure development. The UPI is gradually eliminating the need to carry cash. To make UPI more secure and easier for users, the National Payment Corporation of India (NPCI) keeps improving it continuously.
In line with that, NPCI introduced the UPI Wallet for small transactions, which is not only convenient but also safe in multiple ways. Actually, to use UPI, a person has to link their bank account. Similarly, to use UPI Wallet, the balance has to be credited to the wallet from UPI.
Difference between UPI and UPI Wallet
UPI is a payment system that is used through payment apps like Paytm, PhonePe, and Google Pay. In this, you have to link your bank account and UPI sends money directly from your bank account to the receiver's bank account instantly and vice versa. Whereas UPI Wallet is linked to UPI and money is put into it through UPI. After which when you make payment, the money is transferred directly from your wallet to the other person's bank account.
Advantage of UPI wallet for small payments
UPI wallet is used for small transactions. Through it, you can transfer a maximum of Rs 1000 at a time and Rs 10,000 in a day. Given that, there is minimum money at risk in case of a potential cyber threat. Digitisation in India has been rampant and so far successful, but the fraudsters devise new ways to dupe money from the consumers. The small ambit of the UPI wallet will keep the money in the bank account safe and untouched. Simply put, through UPI the person makes direct transactions from the accumulated money, while in the case of UPI Wallet, a fraction of money is carved out of accumulated money and it is used accordingly.
Quick, convenient
One of the significant features of UPI Wallet is that, unlike UPI, there is no need to enter a PIN to transfer money. This would make payments fast and convenient and can be beneficial for small spending like at a grocery store or tea stall. UPI wallet can transfer a maximum of Rs 1000 at a time. Your bank account is not linked to it and neither is there a need to enter UPI PIN in it. So, the possibility of payment failure made through a UPI wallet is reduced significantly.
