UPI expanded as Unified Payments Interface is a popular digital money transfer technology. NEFT expanded as National Electronic Funds Transfer, is a traditional way to make payments. Both types of payments have revolutionized the way people transact. Unlike decades ago, when payments were made through cheques, the new payment methods currently have made the transfer of money efficient, secure and fast.
What are the differences between UPI and NEFT?
UPINEFTUPI payment works round the clock. Works on the immediate payment principle.Is available only within a specific time. Fund transfer is not immediate. Can take a minimum of half an hour to 12 hours.Any bank’s UPI app can be used to initiate transactions.Transactions can only be initiated via the dedicated app for the bank.Payments and receipt of funds are possible.Only outgoing payments are possible.Transaction limit of Rs. 1 lakh per dayNo transaction limitsOnly a UPI ID is required to complete a transaction.Online bank account credentials are requiredA virtual payment address is all that is required to make a payment or receive a payment.Requires the beneficiary’s bank account, IFSC code details
Which is one is better?
PlatformUPINEFTUPI Id is a unique ID assigned to a person. Payment can be made from any bank account to a person’s UPI ID. Similarly, payment can be received from a payer’s bank account to your UPI ID. The UPI ID of a person is linked to their bank account. The linking can be changed anytime to link to another bank account.NEFT transfers are bank to bank only. For example, if a person has an account with Bank A, they can initiate a transfer only from Bank A to the beneficiary’s account.Transfer costUPI payment is free of cost. Some banks do charge a fee. But it is generally nominal at 0.5 per transaction.Rs. 2.50 for transfers less than 10,000.Rs. 25 for transfers more than Rs. 2 lakh.Bank account requirementA person with a UPI ID need not have a bank account to send or receive money.A bank account is required.Adding beneficiariesPayment in a UPI payment app is made after searching for the beneficiary by way of their phone number or UPI ID and making the payment.Pre-addition and approval of beneficiaries are required.
Why is UPI better than digital wallets?
The number of digital wallets is increasing on a daily basis. It becomes a hassle to maintain multiple digital wallets. A UPI payment app solves this problem. Payment done through UPI can be made from any bank to any bank. There is no need to add beneficiaries, getting them approved. All that is required is the UPI ID. There is also no need to keep money in the UPI account in advance, which is the case with digital wallets. Instead, money can be kept in the bank account and only retrieved when required. This way, money is always in the bank account and is eligible to earn interest.