How is e-Rupi different from UPI?

Unlike UPI, which requires a bank account and a debit card to make payments, e-rupi does not need any of these things, according to experts.

The five key differences between UPI and e-Rupi/CBDC are as follows:

Preservation of anonymity is possible

Digital currency transactions can provide the same level of privacy as cash transactions. The Reserve Bank has asked financial institutions to hide transactions in digital rupees of small value. Bank staff said that once Central Bank Backed Digital Currency Retail is transferred to consumer wallets, banks will no longer monitor or record these transactions. Clients are required to provide their permanent account number for most cash transactions above Rs 50,000. Although no official limit has been set on the value of transactions in digital rupees, it is generally assumed that no retail transaction below Rs 50,000 will be recorded. For tax purposes, all trades worth more than Rs 2 crore would have to be declared.

Transaction without smartphone

Widespread use of the e-rupee in rural and remote areas is expected to be facilitated by the fact that the currency can be used for offline transactions on regular phones, experts said. As the recipient would get the e-voucher in rupees through short message service (SMS) or quick response (QR) code, this is the most efficient method. This will allow it to be used even in places with spotty or no internet service. If it is an SMS, even users without smartphones can use it.

No bank account needed

Although experts noted that a bank account and debit card are required for UPI transactions, the e-Rupi wallet can be used without these things, making it a more convenient payment option.

All one handle

The UPI ID or handle varies across institutions and services. While the UPI ID generated when you connect the same bank account to two different platforms may differ, the e-Rupi ID will remain consistent.

A physical currency deposit is not required

Physical cash is used to support UPI transactions. If there are insufficient funds in the user's bank account, the transaction will fail. In contrast, e-rupees can be used to make digital payments instead of traditional money or cash. RBI issued digital rupees are fully legal tender in India. No physical currency is required for backup.