BackDigital Rupee vs UPI: 7 key differences between RBI's e-rupee and UPI explained
Digital Rupee vs UPI: The pilot phase of RBI's e-rupee went live on 1 December 2022, covering four cities
PremiumDigital Rupee vs UPI: The Reserve Bank of India (RBI) has recently launched digital rupee retail pilot for a closed user group. Through the use of the token-based digital rupee, citizens will be able to make or receive payments in currency in completely digital mode through a mobile app. However, Unified Payments Interface (UPI) is already being used for digital transactions.
So, how Reserve Bank's e-rupee is different from UPI?
1) The biggest difference between e Rupi and UPI is that, e Rupi itself is a currency in digital form enabling digital transactions, whereas UPI is a platform through which transactions happen digitally, said Archit Gupta, Founder and CEO, Clear.
1) The bank acts as an intermediary in every UPI transaction. As a result, in UPI app, the bank account is debited and money is sent to the bank of the recipient. Nidhi Aggarwal, Founder, Space mantra said you can withdraw the amount from the bank in paper money, retain it in your wallet, and use it to make a purchase at a store.
“In CBDC, you will draw the virtual money and retain it in your mobile wallet. When you pay at a store or to someone else, the money is transferred from your wallet to their wallet. The bank does not route payments or act as a middleman," she added.
3) Archit Gupta said that similar to physical cash, you can withdraw e Rupi from your bank account, put it in your phone wallet and spend the money from the wallet at any shop. Whereas while using UPI you instruct your bank to transfer money from your account to the bank account of the vendor.
4) According to Archit Gupta, UPI is a payment platform, one can use debit or credit card, net-banking, mobile wallet etc to make the payment. e Rupi in this respect is like spending physical money in digital form, using one’s mobile phone.
5) Ravi Singhal, CEO, GCL said that when we pay in rupees, the amount is deducted from your bank. On the other hand, in e rupee, the amount is deducted directly from your e rupee. you have bought.
“My bank account is debited when I use a UPI app, and money is transferred to the recipient's bank account. Keeping paper currency in your wallet and spending it at a shop is just as easy as drawing it from the bank and putting it in your wallet," explained Amit Gupta, MD, Sag Infotech.
6) This electronic form of sovereign currency is operated by the RBI and does not entail any individual handlers, as is the case of UPI transactions. Hence, payments with e-rupee are direct and instant, said Kumar Saurav, Global Mobile Business Head, Adcounty India.
7) Another intrinsic property of the CBDC is its anonymity, similar to the case of physical cash. However, the intermediaries (banks) have the data in UPI transactions, added Kumar Saurav.
The pilot phase of the digital currency went live on 1st December 2022, covering four cities (Mumbai, New Delhi, Bangalore, Bhubaneswar) and four banks, SBI, ICICI, YES Bank and IDFC.
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