As digital payments continue to grow in India, there is a need to choose between UPI (Unified Payments Interface) and UPI wallet for small transactions. It is important to know which method is more secure for small payments, UPI or UPI wallet. UPI connects directly to your bank account, while UPI wallet limits your financial risk by using pre-loaded balance. While UPI facilitates direct bank-to-bank transactions, UPI wallet provides a more secure option for small, everyday payments. Here we want to tell you why switching to UPI wallet for small payments can be a smarter and safer option.

What is the difference between UPI and UPI wallet

UPI is a payment system that allows instant money transfer between two bank accounts via a mobile device using apps like Google Pay, PhonePe or Paytm. UPI wallets on the other hand are prepaid wallets linked to your UPI app that store balance and can be used for small transactions without directly accessing your bank account. UPI wallets are generally considered safer for low value transactions as they eliminate the risk of exposing your main bank account for small payments. Which method is better The first problem with UPI is that if your bank account does not have sufficient balance or if the transaction fails, it can lead to delays or overdrafts. UPI wallets eliminate this problem as they allow you to spend only the pre-loaded amount, ensuring a fail-free transaction. Daily limits for UPI transactions may be set by banks and using a UPI wallet can provide more flexibility as wallets often have different limits. This is particularly useful for frequently made small payments such as groceries, utility bills or online subscriptions.