How are UPI wallets different from UPI? All you need to know

With the advent of information and technology, life has become very comfortable and easy. You can now shop from the comfort of your house, pay bills online and many more such convenient options with the help of UPI Payment methods.

Not only this, but you can carry out your transactions through many methods, but UPI offers you the most user-friendly interface and, therefore, is the easiest online payment method to date. You can either scan the QR, enter the mobile number or a UPI ID, according to your preference and proceed with the transfer.

What is a UPI Payment?

It is a platform that integrates all your bank accounts, smooth fund routing and merchant payments under one hood, and makes transactions by generating a QR code, a UPI ID, or even your mobile number.

What is a UPI wallet?

A UPI wallet is also known as the Unified Payments Interface Wallet, which uses the UPI interface of India. It is a digital wallet that allows users to make and receive transfers instantly using the UPI platform.


What is a UPI payment gateway?

It is an intermediary between the merchant’s website/app and the customer’s app or bank. The technology infrastructure has enabled businesses and merchants to accept payments through the UPI platform. It is a real-time payment system developed by the National Payments Corporation of India(NPCI), which allows transfers through a mobile app.

How are UPI wallets different from UPI?

●    Nature of services

While UPI allows their users to link their bank accounts under one app and make instant peer-to-peer and peer-to-merchant transactions directly from their bank account, UPI wallets are digital prepaid instruments that are connected to the UPI payment system, which can store money in a virtual account.

●    Linking of the accounts

The UPI payment method is directly linked to the bank account, whereas a UPI wallet is linked to the mobile number and requires an initial step of adding the money to the wallet.

●    Remaining balance

The UPI transactions are directly credited and debited into the customer’s bank account, while in a UPI wallet, you need to load and maintain the balance before use. You can only spend the amount present in your wallet.

●    Utility

UPI is mainly used for transferring funds between bank accounts, paying bills, and purchasing items from merchants that accept UPI payments. In contrast, through a UPI wallet, you can make online and offline payments, mainly used for small transactions.

●    Transfer facility

While you can send money to any bank account using the UPI even if the other does not have a UPI-enabled app, the wallet requires both the receiver and sender to have the wallets. Otherwise, it would not be possible for the transaction to take place.

Which is the best UPI wallet in India?

I recently started using the UPI wallet because of my overspending habit, which has greatly helped me save money. This was possible only because of Bajaj Finserv, as it is the best UPI wallet in India and is extremely easy to handle and easy to use.

The wallet is helpful as it is mainly used for carrying small payments, and you have total control over your money.


While UPI, UPI wallet, and UPI payment gateway may appear similar, they possess nuanced distinctions. Hence, it’s crucial to discern these disparities attentively to leverage their individual advantages fully. They have indeed brought with them a revolution so big that even the most disadvantaged sections of society now have access to these ways and means, walking towards the dream of a fully digital India!

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