India’s digital payments landscape has undergone a significant transformation by introducing digital wallets, mobile banking apps, and the government-backed Unified Payments Interface (UPI). According to a research paper published in the Reserve Bank of India’s Bulletin, the digital economy in India is growing 2.4 times faster than the overall economic growth due to the strong adoption of technology!

This growth has spurred the Reserve Bank of India (RBI) to recently scale the pilot of a Central Bank Digital Currency (CBDC), also known as the Digital Rupee or e₹. This initiative was taken to transform India into a technology-forward society and accelerate the country’s progress toward a cashless future.

UPI has already found its place in digital payments. e₹ is set to follow the same. Let’s understand more about both and the differences between them.

What is e₹?

e₹ or Central Bank Digital Currency (CBDC), is a type of digital money issued and regulated by the country’s central bank. It can be used for transactions similar to physical currency, but the advantage is that it cannot be lost or damaged since it is managed on a digital ledger.

Currently, the project is carried out in four cities, namely, Mumbai, New Delhi, Bengaluru, and Bhubaneshwar, and after analyzing the responses, will eventually be made available to all the residents across the country.

What is UPI?

Unified Payments Interface (UPI) is a single-window mobile payment system developed by the National Payments Corporation of India (NPCI) in 2016.

UPI allows users to transfer funds instantly between bank accounts through a mobile application. It is an interoperable system, meaning it allows users to send and receive money from any bank account that is linked to the UPI platform.

Differences between e₹ and UPI

The most important point that differentiates the e₹ from UPI is that the e₹ is a digital currency that is officially recognized and supported by the RBI. UPI, on the other hand, is just a payment mechanism that allows money to be transferred from one bank account to another.

No Need To Have A Bank Account

While having a bank account is necessary to use UPI for money transfers, e₹ operates differently as it is a digital currency in itself. Unlike UPI where the money is stored in a bank account, e₹ is stored in a mobile wallet which means that even if a person doesn’t have a bank account, they can still make and receive payments using e₹.

Transactions Without Internet

To use UPI, one must have access to a smartphone and internet connectivity. However, since there are several remote areas in India with limited internet access, RBI has made special provisions for e₹ transactions through SMS. This will broaden e₹’s geographical reach and user base by catering to an audience that UPI has yet to reach.

Minimum Tax Intervention

The RBI has declared that e₹ and Rupee have an equivalent value in physical currency. Therefore, banks offering e₹ are not obligated to monitor or report low-value transactions made through this medium. This means just like cash transactions, e₹ users may not need to disclose their PAN, and transactions under Rs. 2,00,000/- may not need to be reported for tax purposes.

Transaction Limits

According to a recent report, e₹ transactions are more anonymous than other digital transactions, such as UPI, NEFT, and RTGS, as mentioned by experts. While e₹ allows transactions up to Rs 10 lakh, UPI has a transaction limit of Rs 1 lakh per transaction.

Cash Withdrawal

Although UPI doesn’t permit cash withdrawals, it’s possible to withdraw cash using the funds available in your e₹ wallet. This process may be as simple as withdrawing cash from an ATM.

The Future of India’s Digital Economy

From a customer perspective, whether retail or merchant, UPI has gained popularity due to its ease of use and convenience. However, e₹ has included several features that UPI still lacks, and this could give e₹ an added advantage. Also, since e₹ is an initiative by RBI, it automatically creates a high level of trust. As a result, e₹ has the potential to reach an even larger audience, making it a promising addition to India’s payment ecosystem.



The future of credit cards is an exciting topic that is constantly evolving. With a shift in consumer preferences and new technology, the world is moving towards contactless payments. Consumers can tap their phones and make payments and not carry a physical credit card. This has made transacting incredibly convenient.

Trends in India are reflective of this change. India witnessed significant growth in the number of credit card transactions and credit cards issued in the last decade. Finance experts predict that by FY 2027, the total value of credit card transactions will reach INR 51.72 trillion, growing at a CAGR of 39.22%.

In this article, we will understand the future of credit cards and the trends we are most excited about.

Benefits of credit cards

Credit cards offer a plethora of perks and conveniences that make your life easier. One of the most sought-after benefits is the “Buy Now, Pay Later” option. This feature allows you to make big-ticket purchases without breaking the bank. Some other benefits include reward points, discounts, cashback, a chance to improve your credit score, better insurance coverage, and so on.

The future is in the cards

One trend that is likely to gain momentum is the use of biometric technology for transactions. This includes fingerprints, facial recognition, and even heartbeats to verify, identify, and authorize payments. Not only does this make payments more secure, but it also makes the processes faster and more convenient.

Integration of AI for creating personalization

There has been an upward trend in the use of artificial intelligence and machine learning to analyze consumer spending patterns, detect fraudulent activity, and predict future spending habits. This can help credit card companies in offering more personalized services and tailored reward programs.

Virtual cards will be our tomorrow

Another exciting development is the use of augmented and virtual reality. This technology could allow customers to make payments in a virtual store or shopping mall! This would open up new opportunities for online shopping and make it an immersive experience.

Virtual cards are also gaining a lot of traction, owing to a radio technology called NFC (Near Field Communication). It’s very similar to Bluetooth or WiFi which aids in contactless payments. The adoption of virtual credit cards has increased rapidly since the pandemic.

All in all, the degree of growth in the credit card industry depends on how positively companies capitalize on emerging technologies to meet consumer needs.

Conclusion

As the use of cash continues to wane, credit cards will remain a vital part of the financial landscape. From cashless transactions to blockchain technology, online marketplaces, and data analytics, a host of new developments are shaping how we use and think about credit cards. While these changes bring new opportunities and benefits, they also come with new challenges and responsibilities. It’s important for credit card companies to stay up-to-date and adapt to these changes, to provide the best possible experience for their customers.

The future is shaping up to be more secure, more convenient, and more engaging with innovations!