Difference Between Digital Rupee Vs Upi

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It’s Money: It’s a digital token (like a digital 500 rupee note). It’s like withdrawing cash, except it stays in digital form in a special wallet.

The Big Boss: The Reserve Bank of India (RBI), issues it.

Best Used: Since it is an alternate to cash itself, it has potential for offline payments. It is also being positioned for high security transactions, cross-border payments and government benefit transfers.

Privacy: Offers higher privacy. User wallets which store digital currency have advanced encryption and do not go through intermediaries.

Digital rupee is more than just tech. It’s literally a digital form of India’s physical currency and it’s a game changer! It’s not just about moving your money from one account to another, but creating a virtual counterpart to the paper notes and coins we use daily. It’s an alternate to physical cash itself.

Which Zero Balance Savings Account is the right fit for your financial needs? Read on.

So what is UPI then?

UPI is an instant payment system that lets you send money from your bank account to someone else’s using just a virtual ID (VPA) or a QR code. No need to add your private bank details like account numbers or IFSC codes.

A pathway:

UPI is a payment pathway and acts as a messenger, telling Bank A to debit your account and Bank B to credit to receiver’s account.

The Big Boss:

Created and managed by National Payments Corporation of India (NPCI)

Best Usage:

Everyday Stuff! Like paying your fruit vendor, splitting a pizza bill with your friends, online shopping, etc. It works 24×7 linking directly to your bank account.

Privacy:

It’s a bank to bank transaction wherein your KYC record is linked, however it never asks for private details like account numbers, IFSC codes, etc, while making payments.

Let’s decode the differences further:

Also Read: What is Digital Rupee and how does it work?

Aspect	Digital Rupee	UPI
Issuance and regulation	RBI (Reserve Bank of India)	NPCI (National Payments Corporation of India)
Scopes of usage	Large scale corporate transactions, international transfers, maximum security of government backed currency	Quick, everyday domestic payments, shopping, splitting bill payments.
Transaction processes	Transfer digital tokens directly (represents physical money)	Use VPA/QR code to instruct banks to move funds via a network
Overall purpose	Revolutionise cross-border transactions, reduce reliance on intermediaries and enhance financial inclusion by providing a secure, government-backed digital currency.	User-friendly interface and decentralized structure makes it an attractive option for day-to-day transactions.

What does this mean for you?

In the immediate future, you are likely to rely on the lightning speed and convenience of UPI. It’s simple, accessible and works everywhere.

Digital Rupee will be a game changer for people seeking enhanced security of government backed digital funds for large, important transactions. It’s exciting as it gives us a choice! Digital Rupee is an RBI backed currency that promises the anonymity and reliability of cash with the security of digital world.

Digital Rupee and UPI are not competing but complimenting each other. UPI is making payments friction-less and Digital Rupee is making our currency future proof.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.