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The ultimate winner in the UPI vs Digital Cards battle

UPI and Digital Cards have taken the payments ecosystem to the next level


Between October 2018 and January 2019, 67 million debit cards went off the circulation in the economy market. Also, as per statistics, around 6 lakh crore was spent using credit cards, an increase of 30%. On the other hand, UPI clocked a whopping 1.31 billion transactions in December 2019. This has opened up a debate on UPI vs Digital Cards.

UPI, introduced in 2016 is an instant digital payments ecosystem. The ease of transactions coupled with security features like QR and signed intent, Invoice, etc makes it more attractive vis a vis credit and debit cards.


UPI vs Digital Cards

In the course of this blog, let us discuss the distinguishing features of UPI vs Digital Cards debate.


UPI vs Digital Cards Feature 1: Ease of transactions

UPI has an edge over credit/debit cards when it comes to ease of transactions. In case of a credit or a debit card, card details like card number, CVV, card expiry date, etc is entered before making a transaction. The enormous details make the transaction lengthy and cumbersome.

Contrarily, UPI transactions take place upon entering the single information, VPA (Virtual Payment Address) of the payee. Hence, UPI transactions happen in a hassle-free and simple manner. There is no complexity like entering the card details.


UPI vs Digital Cards Feature 2: Cash withdrawal feature

Debit cards have an upper hand when it comes to withdrawing money from an Automated Teller Machine (ATM). Money withdrawal is available 24*7 from any corner of the country. Hence, this feature acts as an emergency cushion for people in the need of money.

Comparatively, UPI does not come with a cash withdrawal feature. Money transfer happens from bank to bank in an online fashion.


UPI vs Digital Cards Feature 3: Level of compliance

Digital cards come with a high level of compliance formalities. For example, to avail a credit card, one needs to have a good credit score. Your credit score helps the banking authorities and companies in processing your credit card request.

On the other hand, UPI does not come with complex compliance formalities. Irrespective of your credit score, you can use UPI to make transactions with KYC verification and your mobile number registration.


UPI vs Digital Cards Feature 4: Refund feature

There are 3 parties in a credit card payment system. Customer, merchant and the intermediary bank ( customer’s bank ). In the case of refunds to the customer, the merchant has to directly deal with the customer’s bank.

While in the case of UPI transactions, merchant and buyer has direct contact. There is no role of an intermediary bank in facilitating the transactions. Hence, there is a reduction in the refund settlement time.


UPI vs Digital Cards Feature 5: Authorising requisite payment

In a credit card transaction system, the overdue amount is auto-debited from a customer’s bank account. Herein, a customer does not have control in authorizing the payment.

Contrarily, in a UPI transaction system, the customer is in full control of the money transfer. He/she can authorize send or receive money requests. Hence, the customer is in full control of the money transactions in the case of UPI.


UPI vs Digital Cards Feature 6: Support from banks

In the case of UPI transactions, banks have access to UPI, even if they don’t allow recurring payments on their systems. As a consequence, there is flexibility and ease of funds transfer.

In comparison, digital cards do not have access to recurring payments if the feature is not active at the bank’s end.









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YOU ARE READING THE ARTICLE COURTESY: SabPaisa (SRS Live Technologies) – headquartered in New Delhi with eight regional offices including Mumbai, Bangalore & Kolkata – is a rapidly growing Fintech company having developed one of India’s most advanced AI-driven recurring payments platform bolstered by another of SabPaisa’s unique products: world’s first hybrid payment platform which has all the payment modes in a single checkout page, online and offline, from UPI to Cards to e-NEFT to e-Cash. Businesses that take SabPaisa’s payment gateway get real-time reconciliation and consolidated reports for all payments, recurring or one-time, online or offline, in a single dashboard, whether the payer is an 18-year-old in Kashmir paying through UPI or a 70 year paying through Cash in Kanyakumari. SabPaisa’s payments and collection application suite have already processed more than INR 12 Billion to date. Learn more about SabPaisa here:

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