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.
Too Long, Didn’t Read?
Digital Rupee is a virtual alternative to physical cash while UPI (Unified Payment System) helps you send money from your bank account instantly with the click of a few buttons. It’s about making your money more accessible without using physical cash.
- UPI is better for everyday use and your daily transactions
- UPI is quick and easy to use
- Digital Rupee is legal tender by the RBI and can be used just like cash
- Digital Rupee makes cross-border transactions and large payments secure and easy
So, choose the right one that works for you and your situation.
Whenever you have to pay somewhere you just whip out your phone, scan a QR code, and voila; that sweet payment confirmation sound and it’s all done! That’s the magic of UPI or Unified Payment Interface.
But lately, there is a new kid on the block: The Digital Rupee!
What is this Digital Rupee? Is it a new UPI app? Is it a Crypto thing? Let us tell you.
It’s a fundamental change in money itself and understanding how it is different from UPI is super important. Let’s break Digital Rupee and UPI down for you.
The Digital Rupee: Official digital cash
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.
Let’s decode the differences further:
| 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. |
Also Read: What is Digital Rupee and how does it work?
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.
Learning Hub
Look through our knowledge section for helpful blogs and articles.
What is an Electronic Payment System?
Empowering seamless transactions with electronic payment systems.
What is a wire transfer?
Learn how wire transfers work, their benefits, and potential risks.
Understanding EFT full form, process & benefits
Simplify your payments and transfers with secure Electronic Fund Transfer.
What is the full form of MMID?
MMID: Your key to fast, secure and seamless mobile banking.
Copyright@ 2025 Axis Bank