Home / Money / Personal-finance /  How UPI is better than other digital payment modes

There are various ways to make online payments and transfers—credit card, debit card, Netbanking, bank transfer modes, e-wallets, and Unified Payments Interface (UPI). Be it payments, transfers or even splitting bills, UPI has superior benefits. Let’s have a look.

No need to add beneficiary

The simplicity of a digital process is that you can complete the process in just a few steps. Fewer steps also means less friction and less time taken to make a transaction go through. In case of payments through internet banking for merchant payments, you have to follow multiple steps—logging into the account using user ID and password, and finally providing second factor authentication (OTP).

To use a debit or credit card, you have to enter the complete name of the card holder, card number and expiry date. With UPI, it's easier—you just need to input your UPI ID, which leads to a payment request being sent to your UPI app. Login and approve the payment by entering your PIN. 

For peer-to-peer transactions as well, regular Netbanking transactions require you to add a beneficiary to your account with all their details like bank account number, bank name and IFSC code. It might then also take some time to activate the beneficiary. With UPI, you can transfer funds without adding a beneficiary.

Even if the recipient is not active on the UPI platform, you can make the fund transfer instantly using only their account number and IFSC code. 

With merchant transactions, UPI transactions up to 2,000 do not attract any payment gateway charges, which is not always the case with other modes of electronic transactions.  

No loading wallets 

Many e-wallets too give a seamless and quick transaction experience, then why bother to have another payments app such as UPI? 

The answer lies in the fact that UPI payments happen directly from one bank account to another. E-wallets offer a similar option without having to add beneficiaries, but you still have to load the wallet first.  To use an e-wallet, you have to go through a separate KYC process. With UPI, no additional KYC is required.

As long as there is no additional charge on making a UPI transaction, it appears to be better in terms of ease and simplicity as well.

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