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UPI vs NEFT

UPI vs NEFT – Key Differences between two online payment modes

    Digital transactions have revolutionized the way we transfer money today. Instead of traditional banking methods, we now have various electronic payment systems. Two such popular methods of fund transfer in India are UPI (Unified Payments Interface) and NEFT (National Electronic Funds Transfer). Although both methods facilitate cashless transactions, they differ in many ways. This blog will explore the differences between UPI and NEFT and highlight their benefits.

     

    Here's a detailed comparison of UPI and NEFT:

    Parameters
    UPI
    NEFT
    Platform
    App-based payments system
    Online mode through net banking & application
    Transaction charges
    Usually free, some banks may levy charges
    Some charges levied by bank based on transaction amount
    Beneficiary details
    Registered mobile number or UPI ID
    Account number, bank name, IFSC code
    Initiation of payments
    Through UPI ID or QR code
    By entering beneficiary details manually
    Transfer type
    Real-time transfer
    Deferred settlement, processed in batches
    Bank account
    Can be linked with any bank account
    Can transfer funds only from a bank account
     

    Benefits of UPI

    UPI has gained immense popularity in India since its launch in 2016. The following are some of the benefits of using UPI for transactions:

    1. User-friendly: UPI has a simple and user-friendly interface, making it easy for users to transfer money. It also supports voice commands for those who have difficulty in typing.
    2. Instant transfer: UPI allows users to transfer money instantly to any bank account or mobile number linked with UPI. There's no need to add the beneficiary manually.
    3. No transaction fees: UPI transactions do not charge any fee for P2P transfers. Although there are some charges for merchant transactions, they are comparatively lower than other modes of payment.
    4. Multiple bank account linking: UPI allows users to link multiple bank accounts with a single app, making it easy to switch between accounts.
     

    Benefits of NEFT

    NEFT has been in use since 2005 and is still a popular mode of payment. Here are some of the benefits of using NEFT:

    1. No limit on transfer amount: NEFT allows users to transfer any amount of money, making it ideal for large transactions.
    2. Low transaction charges: NEFT charges are nominal, making it affordable for users to transfer funds.
    3. Safe and secure: NEFT transactions are highly secure and involve multiple levels of verification before the transfer is processed.
    4. Availability: NEFT is available 24x7, making it easy for users to transfer funds at any time.
     

    Conclusion

    UPI and NEFT are two popular methods of payment that cater to the diverse needs of users. While UPI is ideal for instant and small transactions, NEFT is suitable for large and secure transfers. Both methods have their pros and cons, and users can choose based on their requirements. It is crucial to understand the differences between UPI and NEFT to make informed decisions while transferring funds.

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