Difference Between UPI and Wallet: Unified Payment Interface (UPI) transactions occur directly between bank accounts, while digital wallets function as intermediaries between bank accounts.
Various methods exist for online payments and money transfers, including UPI and Digital Wallets. However, distinguishing between the two can be unclear for many. UPI, or Unified Payment Interface, facilitates instant money transfers between two bank accounts. On the other hand, digital wallets such as Paytm and PhonePe require preloading funds before conducting digital transactions. Let’s explore some key differences between these two platforms.
Difference Between UPI and Digital Wallet
| Features | E-Wallet | YPI |
|---|---|---|
| Transaction Cost | Nil 🆓 | Nil 🆓 |
| Transaction Limit | Non-KYC Verified Users can hold up to Rs 10,000; up to Rs. 1 Lakh for verified users 🛅 | Between Rs 1 to Rs 1 Lakh Per Day 🏧 |
| Transfer to Individuals/companies | Possible but depends on whether the wallet is open, semi-closed or closed ↗️ | Yes 💸 |
| Payment at a physical store | Yes but Very Few allow this ✅ | Yes ✅ |
| Online Payments | Yes ✅ | Yes ✅ |
| Cash Back/ Discounts | Yes 💰 | No ❌ |
| Request for Payment | Very few have this feature ℹ️ | Yes 💳 |
- Unified Payment Interface (UPI) transactions occur directly between banks, while digital wallets act as intermediaries facilitating money transfers between bank accounts.
- UPI utilizes virtual payment addresses and identities, whereas digital wallets rely on your mobile number for transactions.
- UPI transactions have a limit of 1 lakh per transaction, while for transactions from wallets without KYC, the limit is Rs 10,000 per month.
- UPI transactions can be conducted between any two banks, whereas digital wallet transactions occur between accounts within the same digital wallet app. Both the sender and receiver need the app for these transactions.
- UPI allows for future transactions, while digital wallets primarily serve for immediate transactions—money is transferred instantly from the wallet.
FAQ
UPI, or Unified Payment Interface, enables direct bank-to-bank transactions, while a digital wallet acts as a mediator between bank accounts, facilitating money transfers.
UPI relies on virtual payment addresses and identities, whereas a digital wallet typically uses your mobile number for transactions.
UPI transactions have a 1 lakh limit per transaction, while non-KYC digital wallet transactions are capped at Rs 10,000 per month.
UPI transactions work between any two banks, whereas digital wallet transactions happen within the same app—both parties need the app for the transfer.
UPI allows for scheduled or future transactions, while digital wallets specialize in immediate transfers—money moves instantly from the wallet.
