#CashlessConsumer – eWallets, UPI, UPI-Wallets

Cashless has its downsides for consumers. Rejecting cashless or hesitating to embrace technology is not a solution to circumvent the problems of cashless ecosystem. Cashless obviously has its benefits which many of us have experienced in the form of convenience. Embracing cashless and being an informed consumer who is aware of systems and its designs, increases the chance of making the system more consumer-friendly.

I plan to write a series of posts, tweets with #CashlessConsumer explaining upsides / downsides of various cashless payment systems from the consumer point of view. Credit / debit / prepaid / food cards offered by banks and card networks, food coupons, gift coupons, e-wallets, UPI, loyalty reward products, crypto currencies and many other cashless payment products exist today. A comprehensive understanding is essential to make informed decisions.

#CashlessConsumer is a consumer awareness initiative to drive awareness, educate consumers about digital / cashless payment systems, voice consumer concerns, share security best practices, make consumers a stakeholder in the design of payment systems, seek better consumer rights in cashless systems.

Wallet apps. What are they?

Traditionally transacting online was either by providing debit / credit card details or through netbanking interfaces. While there were issues of security which kept improving, the payments experience was not very user friendly. This was also restricted to computers with access to internet. Post smartphone revolution, the wallet apps made it user friendly to send / receive money through apps. Just like our physical wallets, eWallets store money in an easily spendable form. eWallets can be refilled once through netbanking / cards / cash pickups and then can be used for multiple e-commerce / real world transactions. There are many wallet apps and it might be complicated for user to determine which apps should (s)he use.

eWallets, UPI, UPI-Wallets

Following are common queries among the consumers,

  1. Why can’t PayTM be in UPI ?
  2. Why ICICI, HDFC have multiple mobile apps in different names?
  3. How many apps should I install and what is the difference?

In this post, I shall try to explain the difference between eWallet, UPI apps and UPI-Wallet apps.


  • Players:- PayTM, Freecharge, Mobikwik, Ola Money, Airtel Money, HDFC PayZapp, SBI Buddy etc
  • Background :-eWallet simplified cashless payments experience. Earlier, transacting online was access-restricted (not everyone had credit/debit cards); complicated (entering net-banking / card details each time); online payment process had high failure rates due to multi-hop process. . PayTM, Freecharge, Mobikwik were startups built from mobile phone recharges and have since then expanded wallets to a wide range of online / offline payments.There were also companies, like Airtel, Ola, which were in other business’ and wanted to have a wallet primarily for their own payments but later expanded acceptance to other merchants. Banks have also tried their products in this segment to cater retail payment transactions like recharges, ticketing, etc. Wallets are transcending into banks with Payment banks license.
  • Loading of money :- Using internet banking, credit / debit card through wallet apps / websites. Cash pickup / other offline loading methods are offered by a few players. Receiving money from others is also possible.
  • Transactions :- Predominantly online(e-commerce,m-commerce); Increasingly offline, i.e., online payments for offline,real world goods and services (paying local vendor, auto rickshaw)
  • Limits, Rules :- Wallets in India are governed by Prepaid Payment Instrument licenses. Each entity has to setup their own grievance redressal mechanisms. Until demonetization, there was a limit of 10,000 INR (now increased to 20,000 INR) for a non-KYC’d customer who can upgrade the wallet to 1,00,000 INR after submitting KYC documents (valid Proof of Address, Proof of Identity)
  • Key features :- Convenience is main selling point. Cashbacks also attract customers, but informed consumers must also be aware that companies are also in business of making you believe there is a cashback. (when there exists none, because cashback is on inflated price.)


  • Players :- UPI apps (Some UPI apps are also wallets, covered below)
  • Background :- Banking industry which had array of payment products (Cheques, DD, NEFT, RTGS, IMPS, net banking, mobile banking) found that people need easier, simpler way to make payments and failure to address this need will take away from business from serving customers and losing them to eWallets who are increasingly becoming dominant. UPI is a new payments platform to enable digital payments from mobile, right from your bank account. UPI is built on top of IMPS (Immediate Payment Service), offered by NPCI member banks. Understanding detailed design of UPI would need a series of posts in itself.
  • Loading of money :- Not applicable. You actually user your underlying bank account linked to your UPI app to transact.
  • Transactions :- Mobile first. Predominantly Peer to Peer (transfering to your friends / family), merchant ecosystem is yet to take off in a big way.
  • Limits, Rules :- UPI inherits the IMPS limits (1 Lac INR per day), can work only inside Indian territory, is governed by UPI Procedural Guidelines based on RBI’s Payment and. Settlement Systems Act, 2007.  Every UPI app has to have its own grievance redressal mechanism. UPI supports only debit based accounts (meaning credit cards cannot operate on UPI and you can only spend what you have in your bank account)
  • Key features :- Using bank account to make transactions instead of loading of money onto wallets and then spending. You get savings interest till you spend.


  • Players :- PhonePe, Pockets, more coming soon!
  • Background :- Its combination of wallets and UPI. Take UPI features (banking based debit), add wallet features (cashbacks, “offers”), you get UPI-Wallets.
  • Loading of money :- While loading of money is not required like UPI, cashbacks can be obtained into the wallet according to terms of “offers”.
  • Transactions :- Same as UPI, although the ability of usage of cashbacks is limited by providers terms and conditions.
  • Limits, Rules :- Same as UPI, wallet portion would be bound by terms and conditions based on PPI license terms.
  • Key features :- Offers both UPI and wallet features in single app. 

There are positives, negatives in each of these digital app based payment instruments for consumers with regard to service, usability, dispute resolution, privacy, data security, liability protection, cyber security etc. We shall look at these at depth in subsequent posts.

#CashlessConsumer is your initiative, please feel free to voice your thoughts, give feedback on topics to be covered.

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