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As the RBI looks to introduce the digital rupee soon, many are confused about how it's different from the UPI system.
The most significant difference between UPI and e-rupee is that e-rupee is an RBI supported digital currency which is officially recognised. On the other hand, UPI is a payment interface to transfer money.
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When it comes to transferring money using UPI, the money is deducted from your bank account and transferred to the other party. In the case of e-rupee, the money will directly be deducted from your virtual wallet where the e-rupee is stored. Wi
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You can withdraw money from your mobile wallet if you have a e-rupee stored there, which will be similar to visiting an ATM to withdraw cash. However, you cannot withdraw cash using UPI, only transfer between bank accounts.
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When you use UPI for payments, the money is deducted from your personal bank account. However, when you transfer e-rupee, it will be deducted from your virtual wallet.
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The Reserve Bank of India is personally handling the e-rupee project with all its technical and administrative requirements. On the other hand, UPI is run by the NCPI in collaboration with many banks.
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Transferring money using digital rupee will be similar to handing cash to another person, they won't get to know your details. However, in case of UPI, the banks who act as intermediaries know all about your financial transactions.
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