UPI vs NEFT

Are you torn between UPI (Unified Payment Interface) and NEFT (National Electronic Fund Transfer) for your digital transactions? Let’s explore the nuances of these two widely used payment systems in India:

1. UPI (Unified Payment Interface):

• Platform Overview:
• UPI operates as an instant payment service, accessible round the clock.
• It empowers users to send or receive funds via a virtual payment address (UPI ID), mobile number, or QR code scanner.
• Transaction Fees:
• Enjoy zero transaction fees for up to 20 transactions per month.
• Subsequent transactions incur nominal charges.
• Beneficiary Information:
• Initiate transactions seamlessly through any UPI-enabled app.
• Transaction Initiation & Collection:
• Transactions require a UPI ID for initiation.
• Transaction Types:
• UPI facilitates both payments and collections.
• Bank Account Requirement:
• Conduct UPI transactions even without a bank account, thanks to integration with e-wallets.
• Advantages of UPI:
• Speedy, user-friendly, and convenient.
• Real-time fund transfers.
• Initial 20 transactions in a month come with zero charges.
• Operates 24/7, ensuring accessibility.
• Bolstered by secure single-click authentication.
• Facilitates direct payments and collections.
• Easily link multiple accounts to a single UPI ID¹.

2. NEFT (National Electronic Fund Transfer):

• Platform Overview:
• NEFT electronically transfers funds from one bank account to another, operating in batches with a turnaround time of approximately 12 hours.
• Transaction Charges:
• NEFT transactions attract charges along with GST.
• Beneficiary Information:
• Requires account number and IFSC code for transaction initiation.
• Transaction Initiation & Collection:
• Transactions are initiated through the sender bank’s application.
• Transaction Types:
• NEFT facilitates only payment transactions.
• Bank Account Requirement:
• NEFT transactions necessitate a bank account.
• Advantages of NEFT:
• Economical for online fund transfers.
• Operational round the clock.

In essence, UPI excels in swift, low-value transactions, while NEFT is preferable for high-value transfers. Select the method aligning best with your specific requirements!

Sources:
(1) ICICI Bank Blogs: Link.
(2) Business Today: Link.
(3) Bajaj Finserv: Link.
(4) IndusInd Bank iBlogs: Link.