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Demonetisation effecting ? Wallet Companies and Government's UPI to the rescue

The day after Prime Minister Narendra Modi announced the demonetisation of the Rs. 500 and Rs. 1000 notes, the newspapers had full page ads - including several before the first page of news - of the different mobile wallet companies.

Well thats also quite logical to happen, since Wallet Companies provides solution to the sudden cash crunch. Most of the the mobile wallets have been around for years so we now know its trustworthy.

Below is a quick summary on private mobile wallets and Governments UPI (Unified Payment Interface)

UPI : Unified Payment Interface is an initiative by National Payments Corporation of India’s (NPCI), set up with the support of the Reserve Bank of India and Indian Banks Association (IBA).

The way UPI works is a lot like using a mobile wallet - you create a virtual identity (which could be something like yourname@icici) using one of the many UPI apps, and link it to a working bank account.

Most banks have also enabled UPI functionality in their apps, so you could use the app you normally operate your account from and create a UPI id there. When you need to pay someone, just open the app, choose send money, and type in their virtual identity, and then the amount. you can also choose to collect funds on your virtual identity, where you can send a payment request to someone using only their virtual identity - the money is only transferred once the person paying accepts the request.

Mobile wallets : Companies such as Paytm have been in market for a few years now. This first-mover advantage helps consumer buy flight tickets, pay for Uber ride, or even shop via Flipkart or any other e-portals. Even a few domestic vendors and milk booths have subscribed to Paytm, which comes in handy for a lot of people right now. However, unlike UPI, these mobile wallets act as a middle ground between the bank and vendors like Uber.

So, you’ll have to keep refilling its coffer, via debit card or net banking, which isn’t always the safest way to go about. Also, your transactions are limited to Rs 10,000, and for anything beyond that, know your customer (KYC) documents are to be verified. 

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Manish Kumar said…
Thank you for sharing such great information. It has help me in finding out more detail about Upi
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