By VCCIRCLE BRANDED CONTENT
Financial groups have been discussing and emphasising on the use of the new Unified Payment Interface technology, but many people still do not know the far-reaching effects of it.
The unified payment interface is a new mobile payment system that allows the transfer of money between bank accounts. This means that users can pay for goods and services either online or offline without having to remember all kinds of credit card numbers, passwords, or other tedious information. It is easy to use, and beginning to take over the way we pay for goods.
Banks Can Opt for UPI over Digital Wallets
One of the ways that UPI can completely destroy digital wallets is if the major banks opt for using UPI over digital wallets. As of now, many banks are just beginning to utilise UPI, because it is so new and fresh. In India, 26 banks use this technology. However, if the tides turn and more banks choose to use only UPI, it could spell disaster for digital wallets. Digital wallets hold power only when the banks decide to use them.
Simplified Authorization without Sacrificing Security
Everyone’s biggest fears are that with mobile payment systems and mobile banking, the security of people’s financial information will be put at risk. We all want convenience, but we do not want it at the expense of our security. With UPI, there remains a two-step verification process, which sharply increases the security of a transaction by up to 25%. However, rather than having an overly complex, and time-consuming process, this new process uses only a verified mobile number accompanied by a mobile PIN.
One of the major benefits that UPI has over digital wallet companies is that it is much more financially inclusive, allowing a greater range of companies, banks, and customers to utilise its services. Even the best digital wallet companies and apps are only equipped to give access to users who already have a set account with a physical bank. With the use of UPI, you do not have to use a physical bank, but a virtual one instead. This vastly expands the number of people who can utilise the service.
Now, here’s how Digital Wallets can still survive:
Improving an Already Friendly User Interface
While the use of UPI looks bright for the future, there are also many benefits to the use of digital wallets, uses which UPI can improve upon and expand. One of those uses is the friendly user interface. By the very digital wallet definition, a person can have access to all of their credit cards and bank cards on their smartphone, making your phone that much more powerful. The largest digital wallet companies in India have already garnered more than 200 million users combined, which would be a large base for UPI to crack. By utilising the interface of digital wallets, UPI can take over that customer base.
Lowered Transaction Costs
As the case for digital wallets and UPI used together proceeds, the issue of transaction costs is paramount. Many people complain that the use of mobile banking and mobile payment systems create excessive costs. With the use of both UPI and digital wallets, more banks, companies, and customers will be included. This larger base will allow for decreased costs, saving everyone money. More people will join, lessening the need for more transaction costs. However, only the implementation of UPI in conjunction with digital wallets can create this scenario.
Store Information Safely
One of the problems with digital wallets currently, is that they share the private information with merchants, who can then hold onto that information. This makes users almost twice as likely to become hacked. To combat this issue, UPI can help increase the security of digital wallet transactions. Rather than provide information to merchants, UPI will allow digital wallets to use tokenized versions of information, allowing the transaction to take place, but it does not give any personal or sensitive information to the vendor. Users and business are protected from hacker's attempts.
One ID for All Wallet Cards
Digital wallet apps require you to remember the log-in and security information for each and every card that you have. This can be a hassle for those who are looking for speed and convenience. The implementation of UPI in coordination with digital wallets will make online shopping and physical shopping much easier, with only one identification and log-in that will give the user access to the whole wallet. It does not sacrifice security, however. With the security technology of UPI, the single identity is more secure than using individual security log- ins and information that other methods use.