Thumbnail: India’s UPI beating blockchain in digital payments
Tags: UPI, Unified Payment Services, UPI goes global, UPI in Europe, UPI outside India, WHat is UPI, QR-code payment systems, UPI UPSC, UPI explained,
The introduction of blockchain-based cryptocurrencies was done to transform global commerce. But Instead, the digital currencies become nothing more than an empty speculative asset.
Meanwhile, access to real-time secure online payments has become an imperative notion in the digital society today. Leading from the front, India has been making giant strides towards promoting digital payments transactions with its Unified Payment Services – (UPI).
The results of these efforts are evident as recently, Lyra Network – a French company, has announced that it would deploy UPI. This is the entrance of UPI into the European Union (EU) as an alternative payments system designed to be reliable, secure, and interoperable among other digital payment firms.
Notably, the global presence of UPI is apparent as countries like Bhutan and Nepal are already accepting UPI, and it is likely to go live in Singapore very soon.
Further, merchants in Singapore, Cambodia, Malaysia, Thailand, Philippines, and Vietnam accept UPI payments through QR-code payment systems.
Importantly, the National Payments Corporation of India (NPCI) is in talks with Australia to integrate UPI with Australia’s own nascent fast payment rail, called New Payments Platform.
The genesis of UPI ( Graphics)
The National Payments Corporation of India (NPCI), an umbrella organization for operating retail payments and settlement systems in India, conducted a pilot launch for UPI with 21 member banks. The pilot launch was started on 11th April 2016 by Dr. Raghuram G Rajan, Governor, RBI at Mumbai. Carrying this forward, Banks started to upload their UPI-enabled Apps on the Google Play store from 25th August 2016 onwards.
The Rise of UPI ( Graphics)
The prime reason behind the global adoption of UPI can be understood with hasslefree functioning of it with a very large population.
By facilitating exactly what blockchain was supposed to do—cutting out intermediaries and inducing greater competition—UPI could accelerate global innovation in payment technology.
To digitize the financial sector and economy, the Government of India’s strategies are also promoting digital payments transactions, which are steadily increasing over the last few years.
These initiatives have been working with the ethos of making the digital payments ecosystem an essential aspect of the Digital India program.
Riding on the back of these efforts, digital payment transactions have grown multifold in India, from Rs 2,071 crore in Financial Year (FY) 2017-18 to Rs 5,554 crore in FY 2020-21. In the current financial year FY 2021-22, the total number of 8,193 crore digital payment transactions were reported till 20th March 2022.
This is part of a growing trend of critical technologies emerging from beyond the usual innovation corridors. India has gone from having few startups of value to hosting dozens of billion-dollar valuation unicorns.
The other facet of this journey is the ‘Aadhar digital-identity’ program, which has expanded economic inclusion for hundreds of millions of its citizens, and the commercial platform that UPI created. The rationale behind UPI is to create a neutral marketplace and commerce platform that is accessible and low-cost .
In the last 6 years alone, UPI transactions have skyrocketed, now exceeding $100 billion per month. For over 150 million monthly users, these transactions occur largely via mobile wallets and payments applications.
Presently, UPI transactions are free but to sustain the model it will eventually cost only a tiny fraction of what consumers and merchants pay to move money on private payment systems such as those run by Mastercard and Visa.
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