UPI – Is It a Real Threat to Digital Wallets?

With improvements in mobile internet penetration and the recent demonetisation, UPI is bound to add more value to the digital wallet ecosystem.

- Manoj Apte

With the introduction of Unified Payment Interface (UPI) this year, National Payment Corporation of India (NPCI) struck a right cord in fulfilling dream of digital India. As UPI is making its way to market, many analysts have started comparing it with digital wallets. The growing consensus depicts end of an era for mobile/ digital wallet companies with the introduction of UPI. It is too early to come to a final conclusion. The key advantages of digital wallets are the 3C’s to consumers such as Convenience, Cashback and Channel-agnostic offering. On the other hand, wallets face challenges in terms of interoperability, insufficient infrastructure, high transactional cost etc. Where-as UPI value proposition includes but is not limited to simplified 2 factor authentication, use of virtual address instead of bank account number, real time push and pull payments and is regulated by central bank.