UPI is being used by more than 300 million people to make payments today and around 500 million merchants are accepting UPI payments today. Now UPI is gradually expanding in many countries but do you know about the advantages and disadvantages of UPI?
Just as every service has some advantages and disadvantages, in the same way, UPI also has advantages and disadvantages. Let us try to tell you all the advantages and disadvantages of UPI in today’s post.
Advantages and Disadvantages of UPI Transaction
1. Advantages of UPI transaction
Let us first tell you the benefits of UPI, The advantages of UPI are such that it is secure, fast transaction, no need to pay any kind of money to use UPI, and apart from Some of the benefits of UPI are as follows
The transaction that takes place through UPI is completely secure because UPI is a payment method in which bank-to-bank transactions take place.
There is no third party involved in this, even if you are using a third party app like Paytm, PhonePe, Google Pay, the transaction is bank-to-bank only.
Not that the money comes from your bank account to these third party apps and then goes to the place where you are making the payment, nothing like this happens. Money goes from your bank to someone else’s bank, which is why there is no problem of any kind related to security.
Compared to other payment methods available in India, transactions through UPI are much faster. Let us tell you that to make a payment through net banking or a debit card, you have to enter many details. Simultaneously OTP has to be entered, and after that payment is done which takes a lot of time.
Also Read : Advantages and Disadvantages of BHIM App
But to make a payment in UPI, all it takes is a few clicks and entering your UPI PIN and the money is transferred. On an average, it takes 10 seconds to complete a UPI transaction.
Free to use
You do not have to pay any fee for using UPI. For using any other payment method, annual fees or other types of fees have to be paid. But you do not have to pay any kind of fee to use it, it is absolutely free for all users.
UPI never tries to earn money from users, rather it earns money from other sources such as subscription revenues, commission income, and financial services marketplace.
Many offers and rewards
You get to see many types of offers and rewards on using UPI. Let us tell you that these offers or rewards are not given by UPI but by the merchant to whom you make the payment. Also, these offers and rewards are given by the third-party UPI applications you use such as Paytm, and Google Pay.
Many UPI apps also offer offers after activating the account. Such offers are not seen on any other payment method.
Support credit card
Recently, an update of UPI has come that all Rupay credit cards will support UPI. That is, if you have a Rupay credit card, then you can pay through UPI. For this, you just have to link that credit card of yours with your UPI app once.
So this is also an advantage of UPI that you link your Rupay card with UPI and after that you do not need to carry your Rupay card everywhere. You will be able to pay from your mobile phone only.
Easy to pay and receive
Nowadays, most of people in India prefer to use the UPI method to send money to someone or take money from them. This is because it is much easier to send or receive money with UPI.
The first reason is that the first transaction is done through it, the second reason is that its transaction is very easy. The third reason is that it is not necessary to share many details like bank account number, bank holder name, IFSC code, etc.
Payment can be taken or given immediately by simply sharing your UPI ID, UPI mobile number or QR code.
No required OTP for every transaction
Once set up for UPI in any authorized UPI app, OTP is not required for any UPI transaction. Whether you transfer money to someone’s bank account pay with a QR code or set up auto payment, you do not need OTP.
The first time you set up UPI, you will need the OTP. This is also an advantage, to make payment through UPI, one does not have to wait for OTP again and again, nor does one have to enter OTP. Payment is successful by simply entering the UPI PIN.
Auto payment support UPI
Many times the user has to set up auto payment to take a subscription. Without setting up auto payment, they start facing many problems, which is why UPI gives all users the option to set up auto payment. So this is also an advantage of UPI that auto payment can be set up through UPI.
2. Disadvantages of UPI transaction
As we told you at the beginning of this post every service has advantages and disadvantages too. Similarly, there are some disadvantages of UPI too, so let us tell you the Disadvantages of UPI in detail below.
SIM card required
To conduct UPI transactions, the SIM card must always be present in your mobile phone. No matter which UPI app you use, if your mobile phone does not have a SIM card with which you have activated the UPI app, then you will not be able to do any kind of transaction through UPI. So this is also a disadvantage of UPI. Let us tell you that the SIM card should be on your smartphone even to check the bank balance.
Bank account required
To use UPI, the user must have a bank account. Whether he has an account with a normal bank or an account with a payment bank. If the user does not have a bank account, he will not be able to use UPI at all as he needs to select his bank account at the time of activating UPI.
Apart from having a bank account, the user must have a debit card or their bank account must be linked to the Aadhaar card. Their mobile number should be linked to their Aadhaar which is the mobile number they have given in their bank account. Only then he will be able to use UPI.
Not better support by some banks
If any kind of problem arises in your UPI transaction, then you may have to face a lot of problems. This is because there are many such banks that say that if you have used a third-party UPI app, then we will not be able to provide you any support in this. You should contact that third-party UPI app.
When trying to contact through a third-party UPI app, it is difficult to contact. Even if the user contacts, then through those third-party UPI apps it is said that you should contact your bank, and they will be able to support you better.
So that’s why UPI has a disadvantage in that some banks and third-party UPI apps don’t have a better support system for UPI.
Increase habit of spend
UPI helps in fast and easy transactions but according to some users, they get addicted to UPI very soon. It is very and very easy to use, because after using it for some time, people start doing every single transaction with UPI.
Due to this their habit of spending increases and they start spending more than before. So this is also a disadvantage of UPI that users develop the habit of spending more.
Deducted money take longer time to credited again
Suppose you are making a payment to someone and the money gets deducted in your bank account but does not go to the person to whom you want to send it, then it may take a lot of time for you to get that money.
Money deducted from some UPI apps or banks is returned within a few minutes, but most of the money deducted from bank accounts gets refunded only after 24 to 48 hours. If you do not have much money in an emergency, then you may have to face a lot of problems. Whatever you do, you will not be able to get your money back before 24 or 48 hours.
Apart from this, in some UPI apps, it is not even confirmed whether your deducted money will go to the person to whom you are sending it or will be returned back to you. So this is also a disadvantage of UPI.
Too many apps for UPI
Now UPI is a better payment method in itself and when there are more apps available that provide the option of UPI apps, then the user can get a good UPI app also. But in today’s time, more and more apps have become available to provide the option of a UPI payment method.
Because of this, the user does not understand which UPI app to use. In today’s time, normal financial apps ranging from investing have also started giving the option of making UPI payments, due to which there is a lot of confusion.
So in this post, we have tried to tell you both the advantages and disadvantages of UPI. While we have told you as many advantages of UPI as possible, we have also tried to tell you all its disadvantages. If you have any advantages and disadvantages of UPI from your point of view, you can comment on that also.