UPI’s dominance in payments landscape

A current dialogue paper by the Reserve Bank of India sought suggestions on the thought of levying costs on digital payments, together with on UPI. The ministry of finance on Sunday rejected the thought, calling UPI a “digital public good”.

The ministry’s clear stance is telling: since its launch in 2016, the UPI-based cost system has turn into some of the widespread modes of payments attributable to its ease of use, reliability and safety. So a lot in order that three in each 4 digital monetary transactions in the nation at the moment are UPI-based.

The surge has been aided by pandemic-led adjustments in buyer’s preferences, rising acceptance by retailers and fintech innovation. The development trajectory is more likely to proceed and the digital cost market is more likely to triple by 2026, based on a BCG-PhonePe report.

While stakeholders concerned in the payments infrastructure say the rise in UPI additional necessitates transaction costs to cowl prices, the flip aspect is that such levies might additionally discourage a digital payments phenomenon whose ubiquity has taken over India in the final year or so.