Which of the following is a most likely consequence of implementing the ‘Unified Payments Interface (UPI)’?
- Mobile wallets will not be necessary for online payments.
- Digital currency will totally replace the physical currency in about two decades.
- FDI inflows will drastically increase.
- Direct transfer of subsidies to poor people will become very effective.
Explanation
Option (a) is correct
- UPI allows instant fund transfers directly from bank accounts, reducing the need for mobile wallets as intermediaries for online payments.
- Difference between UPI and digital wallets:
- Unified payment interface (UPI) transaction is a direct bank to bank transfer whereas digital wallets act like intermediaries between bank accounts.
- UPI uses virtual payment address and identity whereas digital wallets use mobile number.
- UPI transactions can take place between any two banks whereas digital wallets transactions occur between two accounts in the same digital wallet app.
