Wednesday, September 20, 2017

Forget e-wallet. What is your UPI ID?

It's quite a few years since e-wallets came. Most of banks and e-commerce players have one. Then there are those like Paytm and MobiKwik.

These e-wallets are like the physical wallets we carry with us. Take money from the bank, put it in the wallets, and spend money from the wallet.

But frankly, I never understood, why one should put money in the e-wallet from the bank, and then spend it, when we can make payment directly from the bank? Why move money twice?

Someone told me, it's more secure. If your bank account is hacked, a lot of money could be gone. But if you wallet is hacked, only the little in the wallet would be gone. True. But even if you have a wallet, nothing stops from your bank account getting hacked.

Unified Payments Interface

Now we are getting hear more and more about UPI. What's that?

It's the abbreviation for Unified Payments Interface. It's a system that connects many banks to one mobile app. When you want to pay someone, you can choose to pay from any bank (where you have an account, obviously) via that mobile app.

PhonePe, a Bengaluru-based company was one among the first to take the lead in bringing in an easy way to link your bank accounts to your mobile app, so that you can make payments directly from your bank, with a few taps on your phone, without having to know the recipient's bank account details. The app was launched in December 2015.

In December 2016, the National Payments Corporation of India, launched a UPI app, under the name Bhim.

And day before yesterday, Google launched Tez.

Why I prefer UPI to e-wallets

The biggest takeaway is the ease of transaction. You can connect more than one bank to the app; and payments go directly from your bank account. No more multiple movements of money from one place to another.

Another reason is in e-wallets, sender and receiver should have same app. I can't transfer money from my Paytm to a MobiKwik user. But in the case of UPI, any two people who have UPI can transfer money to each other irrespective of the app they use. So transfer from PhonePe user to a user of Bhim or Tez is possible if sender knows the UPI ID

PhonePe should have been quite popular by now. Unlike Bhim and Google Tez you can pay for many utility services from the app.

My gut feeling is that UPI is way forward for now. Only that the apps need to have features on them.

What is your UPI ID?

Most importantly, retail stores, pharmacies, utility services, and any other place where people need to make payment, have to publicize their UPI ID, so that payments can be made easily.

It's very easy to get one. It's like an email ID, which I need if I need to send you a mail.

Download PhonePe, or Bhim or Google Tez.

Your phone number is verified. Then you need to link one of your banks. Then, you get a UPI ID for that particular app. If it's PhonePe, it's usually your phone number@ybl; it is if Bhim it's phone number@upi; if it's Tez, it's your Gmail ID@ok(name of the bank which you have linked).

If some one has to pay you money; just provide them your UPI ID, and ask them to open a UPI account.

Money transfer can't easier than this. It's all transparent and accounted. No problem of getting change.

Go digital. Know not just where money is coming from, know also where it is going to.


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