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2 mins Read | 10 Months Ago

UPI vs NEFT: What are the Benefits of UPI

UPI vs NEFT, What are the Benefits of UPI

UPI has become the most used digital payment option among several users. Along with that, NEFT has also undergone improvements with banks reducing the charges associated with it. Let’s get to know what is the difference between the two and the benefits of UPI

Innovation in technology has made our life easier, unlike before. There has been a paradigm shift in the way we carry out payment and banking tasks. When it comes to sending money to someone, Unified Payment Interface or UPI is a popular choice among several users as it helps you to send or receive money using the scanner, mobile number or a UPI ID. On the other hand, NEFT or National Electronic Fund Transfer is also widely used as an online money transfer method electronically from one bank account to another.

Let’s get to know the difference between UPI and NEFT:

Parameters

UPI

NEFT

About the Platform

Works like immediate payment service and is accessible 24*7

The transfer of money through NEFT takes around 12 hours

Transaction charges

Zero charges for transactions up to 20 transactions per month

It attracts transactions charges & GST

Beneficiary details

The transaction can be initiated using any UPI app

The transaction needs to be initiated with Sender bank’s app

Initiation of Payments & Collections

Requires UPI ID

Requires Account number, IFSC, etc

Transfer Type

Both Payment & Collection of the transaction is possible

Only payment transactions are possible

Bank Account

UPI payment is possible even if you do not have a bank account. It is possible through e-wallets

For NEFT, having a bank account is a necessity

What Are The Benefits Of UPI?

  • Quick Payment: UPI-enabled digital payments are quick, convenient and easy to use

  • Virtual Payment ID: You can use any UPI app such as ICICI Bank’s iMobile pay app that allows you to carry our transactions with just a virtual payment address, i.e. UPI ID

  • Real Time: The funds are transferred in real-time

  • Free Transfer: There are zero transaction charges for up to 20 transactions if you are sending money via UPI. If you are using the ICICI Bank UPI app, you will be charged from the 21st transaction, which is Rs 2.50 for transactions less than or equal to Rs 1,000 and Rs 5.00 for transactions above Rs 1,000 will be applicable.

UPI fund transfer is available 24*7 that can be used anytime, anywhere

  • Secured: It requires a single-click authentication

  • Direct Pay: You do not need to store or register the beneficiary’s details before initiating any transaction

  • Collect Payment: One can also get payments from clients through this app’s collect payment option

  • Link All Accounts: You can easily link all your accounts to this one ID on the UPI app

Benefits of NEFT:

  • Cost-Effective: This is the cost-effective type of online fund transfer

  • 24*7 availability:NEFT transfer is available 24*7 all days of the year

  • Safe and Secured: It is an extremely safe transfer method as there are no chances of fraudulent instances

  • No Cheque: There is no requirement for any cheque or DD payments

  • Confirmation: Once a transfer of money is initiated, the confirmation is provided to both parties via SMS

Using the UPI app or NEFT depends on your requirements. If you want to make a quick payment or send money to your family member or friends, UPI enabled app is the best option. You can do the transfer using a mobile number or virtual ID. Alternatively, if you don’t have a UPI app, you can use the NEFT method to send money online. Both are completely safe and secure.

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