UPI vs Wallet vs Credit Cards: The Complete Comparison

Every major economy seems to be on course toward becoming a cashless society at some point in the future and the rise in contactless payment options is proof of the seismic shift in the way we pay for things.

However, something that is far from clear is the public perception of which contactless payment option is the best one to use. Should you choose a  UPI (Unified Payment System), use your credit card, or access a digital wallet via your mobile banking app?

As you might expect, all three options come with a certain amount of potential pros and cons but some are viewed more favourably than others when it comes to making payments from bank to bank, for instance, where the UPI options come out best of all.

Here is a comparative look at these popular payment options.

UPI scores heavily for making direct payments

If you want to make a payment from one bank account to another it is clear that the UPI scores heavily and comes out on top.

The reason for this is that you don’t have to concern yourself with loading different applications to complete the transaction and payment is normally faster, easier, and more secure with UPI compared to its rivals.

You get multiple platforms combined into one simple option with UPI and the fact that there are no transaction charges, and you don’t even have to add beneficiary details to complete the process means that UPI outperforms the other payment options in this sphere.

Availability is another key issue

You can find an argument that favours all three contactless options in some way or another but it is worth remembering that there are well over 850 million debit cards in circulation throughout India, compared to about 60 million credit cards.

Being able to carry out transactions by accessing the debit card community gives UPI and edge in terms of availability.

What about user experience?

Another key factor is the ease of use and the general experience you enjoy when using either UPI, a digital wallet, or credit card.

If you are carrying out what is referred to as a P2M transaction (person to merchant) using your smartphone you will find that most of the actions required to complete the transaction are required by you as the user.

In comparison, the process for UPI tends to be more straightforward, and is likely to prove more streamlined than the other available option of using your digital banking app.

Which one works best for you?

The fundamental question is which one to choose in the battle for supremacy as cash fades away from the scene?

There is no question that debit and credit cards are easy and convenient for many consumers and digital wallets such as Paytm have become mainstream since the advent of demonetization.

UPI provides a stable digital payment system throughout the country and all of the major banks have adopted the option to their payment gateways.

Overall, UPI has more scope for future expansion, and because it is so easy to use it has to have a bright future as the way forward when cash is no longer a hard currency used by most of us.


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