Writing in ThePrint, Venkatesh Hariharan discusses how UPI's success story demonstrates India's ability to build world-class payments infrastructure from scratch. Excerpts:
"UPI has also made payments simpler by removing the need to enter lengthy bank account numbers and IFS codes. To make a UPI payment, the user has to know only the recipient’s virtual payment address (VPA), which is a simple combination of username and bank name that looks similar to abc@xyzbank. It is a modern, mobile-first system that does away with the need for physical cards. In a country like India, with its low literacy levels, this kind of simplicity is essential for financial inclusion."
On UPI being a policy innovation:
"UPI is also a policy innovation because it was designed to be interoperable from Day One. In many countries, payment networks have grown rapidly and regulators have tried to enable interoperability in hindsight. For example, it is only after the rapid growth of Alipay and WeChat that China has made them connect to Wang’lian, a public clearing and settlement institution for online payments. The interoperability of the UPI platform means that, once a user has downloaded and signed up on UPI, s/he can instantaneously send money to anyone else on the UPI system. It must be noted that very few countries, including the US, have a national payment network that enables instant settlement."
Read the full article here.