- For instant deposits, exchanges offer Payment Gateways.
- Payment gateways do not support some major banks and charge 2-4% fees for deposits.
- NEFT/IMPS based deposits take too much time.
- Exchanges have started using UPI for Deposits to cater to the demand of “Quick” Deposits.
- But are the people aware of it? One user of an exchange travelled over 1000 Kms to visit their office. Why? To ask how UPI works.
Markets are down and you want to buy the dip? Need quick INR deposited on the exchanges to buy your favourite coins? Too bad instant deposits and withdrawals using IMPS/NEFT are not available anymore. But there is an alternative.
Multiple exchanges offer payment gateway based deposits. These are in theory – instant, unless the PG or the bank run into a problem. In most cases, Payment gateway picks up the money from your bank account and sends it to the exchange. You cannot use credit or debit cards, just net banking.
The Advantages of Payment gateway
- Almost Instant
- Any bank can be used to deposit money (not just the registered bank account)
Exchanges like Coindelta, Coinome, Koinex and Zebpay offer deposits via payment gateway.
But there are some disadvantages of Payment gateways
- Payment gateways charge 2% or more fees for a transaction.
- They do not support major banks like HDFC, ICICI, Axis and Kotak Mahindra.
- If your deposits don’t go through, it takes days for the settlement.
Coinome is the only exchange that currently offers free deposits using payment gateway, but once again, the major banks are not supported.
There are several payment processors in India that cater to crypto exchanges. Coinome is using the parent company Billdesk. Koinex is using fonepaisa and PayU. Coindelta uses Cashfree and Zebpay uses PayU as well.
In a bearish market paying 2% or more fees for deposits and later paying the trade fees can actually make buying crypto really expensive. There has to be an alternative.
UPI is here to Save the day
If there is one thing to appreciate about India, it is the ability to innovate in the Finance and Banking sector. UPI is the latest and trendiest addition to the amazing payments ecosystem in India. So much so that now you can send or receive money from Whatsapp using UPI. Google even entered the space with their own UPI app called Tez.
Exchanges are seizing the opportunity to use UPI for deposits
Many crypto exchanges now offer INR deposits using UPI. This solves 2 major problems.
- All banks are supported.
- You can process UPI deposits instantly.
The best example for instant UPI deposits would be Coinome and Bitbns. Both these exchanges are able to process UPI based deposits instantly. The process is entirely automated. You do not have to enter the transaction numbers of your transfer like you have to in many other exchanges that support UPI.
Even when you do have to enter your transaction ID, it is faster. But obviously the automated deposits where you don’t have to enter ay transactional information is a cherry on the top. Just make sure you transfer money from the registered bank account only.
There are a few more benefits with UPI that makes it mightier
- Making payments with UPI gives the user the opportunity to use multiple apps. There is BHIM, PhonePe, Tez and so on. Not all netbankng solutions from banks are robust and user friendly.
- Rewards from the individual apps like Tez and PhonePe can help the user earn some precious Cashback.
- IMPS is as fast as UPI but there are charges involved. Axis Bank charges anywhere between 5 – 20 INR per IMPS transaction.
Adoption of UPI still an issue
UPI is easy to use for many. But not so easy for a Gujarat resident who travelled to an exchange office in Mumbai to understand how UPI works. This is quite a rare case, many users have actually embraced UPI deposits wholeheartedly. The digital payments in India are set to cross INR 1800 Crores this fiscal year. A good part of it will be UPI.
Despite the digital push and huge increase in adoption, there are still people and merchants who are reluctant to adopt newer methods of payments.
Many merchants still use NEFT/IMPS, credit cards and debit cards as convenient payment channel. Some have moved on to use digital wallets like Mobikwik, Ola money and so on. Paytm lies in the middle with a payments bank catering to everyone. A part of the blame can be thrown at the system too.
“I am having trouble setting it up, sometimes the bank servers are down or sometimes the UPI app servers are down”, said a telegram user who don’t want to be revealed.
“I have 2 bank accounts in Axis Bank. Both of them have the same mobile number. So I cannot setup UPI for it, because that is not supported”, says another user. She is still using NEFT/IMPS channels for deposits on exchanges that support it.
But if you cross these barriers and are registered onto one UPI app, the road from there is smooth as silk. You can transfer money to any mobile number, VPA or even to a bank account number. Any bank, any time, and it is free.
How to use UPI?
Coin Crunch would like to take this opportunity to encourage UPI deposits to exchanges that support it. The more the adoption, the easier it will get for everyone.
Have a look at some of these tutorials to understand how to deposit money using UPI.